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in Signal Hill, CA
Signal Hill investors and self-employed buyers often can't document income the traditional way. Bank statement and DSCR loans both skip W-2s, but they solve completely different problems.
Bank statement loans verify your personal income through deposits. DSCR loans ignore your income entirely and focus on what the property earns.
Bank statement loans let self-employed borrowers use 12 to 24 months of business or personal bank deposits to prove income. Lenders calculate monthly income from your average deposits, usually applying a 50% expense ratio.
These work for owner-occupied homes, second homes, or investment properties. You need decent credit and at least 10% down, sometimes 15-20% depending on the lender.
DSCR loans qualify you based solely on rental income from the property you're buying. Lenders divide the monthly rent by the monthly debt payment to get a ratio. Most want 1.0 or higher, meaning rent covers the mortgage.
Your job, tax returns, and personal income don't matter at all. These are investment-only loans. You can't live in the property.
The biggest split is property use. Bank statement loans work for homes you'll live in. DSCR loans are strictly for rentals you won't occupy.
Documentation differs completely. Bank statement loans need months of deposit history and decent personal credit. DSCR loans need a lease agreement or rental appraisal, but your credit can be lower and they won't review your bank accounts.
Choose bank statement loans if you're self-employed and buying a home to live in. They also work for Signal Hill investors who want flexibility to occupy the property later.
Pick DSCR if you're buying pure rentals and your personal income is complicated or non-existent. DSCR is cleaner when you have strong rental comps but messy tax returns.
No. DSCR requires the property be investment-only. Bank statement loans allow owner occupancy, making them incompatible for the same use case.
Rates vary by borrower profile and market conditions. Generally similar, though DSCR can edge lower when the property has strong rental income and high DSCR ratio.
Neither requires tax returns for income verification. That's the main advantage of both non-QM programs over conventional loans.
DSCR often closes quicker since underwriters don't analyze personal finances. Bank statement loans need time to review 12-24 months of deposits.
Yes. DSCR loans don't count against DTI since they ignore personal income. You can stack multiple investment properties easier than with bank statement loans.