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in Sierra Madre, CA
Sierra Madre buyers often choose between bank statement and DSCR loans when traditional W-2 income won't cut it. Both are non-QM products, but they solve different problems.
Bank statement loans work for self-employed borrowers buying primary homes or investment properties. DSCR loans are strictly for investors who want rental income to qualify them.
Bank statement loans use 12 to 24 months of business or personal bank deposits to calculate your income. Lenders typically count 50% to 75% of average deposits as qualifying income.
You can use these loans for primary residences, second homes, or investment properties. They work well for business owners who write off significant expenses and show low taxable income.
DSCR loans qualify you based solely on rental income versus property debt. The property must generate enough rent to cover the mortgage, taxes, insurance, and HOA fees.
You need a DSCR ratio of at least 1.0, though many lenders prefer 1.1 or higher. Your personal income, employment, and tax returns don't matter at all.
Bank statement loans require proof of your personal or business cash flow. DSCR loans ignore your income entirely and focus on the property's rental performance.
DSCR loans won't work for owner-occupied homes in Sierra Madre. Bank statement loans can finance your primary residence, vacation home, or rental.
Choose bank statement loans when you're self-employed and buying a home to live in. They're also better for rental properties when the numbers are tight and you need personal income to qualify.
Pick DSCR loans when you're buying or refinancing a rental and the property cash flows well. If you don't want to provide tax returns or verify employment, DSCR is cleaner.
No. You pick one qualification method per loan. If it's a rental with strong cash flow, use DSCR. If you need personal income to qualify, use bank statement.
Rates vary by borrower profile and market conditions. DSCR often prices slightly better when the property has a DSCR above 1.25.
Bank statement loans sometimes require business or personal tax returns depending on the lender. DSCR loans skip tax returns entirely.
Yes. Bank statement loans work for investment properties when you need to combine personal income with rental income to qualify.
Both typically need 620 minimum credit. Some DSCR lenders go lower with higher down payments and stronger property cash flow.