Loading
in South Gate, CA
South Gate investors face a choice when conventional loans won't work. Bank statement loans qualify you on business income. DSCR loans ignore your income entirely and look only at rental cash flow.
Both are non-QM products with similar pricing. The difference is whether you're buying to hold long-term or flipping properties while running other businesses.
Bank statement loans use 12 or 24 months of business deposits to calculate qualifying income. We average your deposits and apply a percentage based on your business structure. Sole proprietors get 50% credit, S-corps get 75%.
This works for contractors, consultants, or real estate agents buying primary homes in South Gate. You need steady deposits and clean bank records. HousingWire recently covered how some lenders now accept crypto holdings as income on non-QM deals — expanding what counts as verified funds.
Expect 15-20% down and rates 1-2 points above conventional. Credit scores start at 620, but 680+ gets better pricing.
DSCR loans ignore your tax returns completely. We divide monthly rent by the monthly mortgage payment. If that ratio hits 1.0 or higher, you qualify. A 1.25 DSCR means rent covers the payment with 25% cushion.
South Gate investors buying single-family rentals use this when they already own multiple properties. Your personal debt-to-income ratio doesn't matter. The property either cash flows or it doesn't.
No income docs, no tax returns, no employment letters. Just an appraisal with a rent schedule. Rates run similar to bank statement loans, sometimes slightly higher.
Bank statement loans require proving you earn money. DSCR loans don't care what you earn. That's the core split. If you're self-employed buying a primary home, bank statement is your only choice.
DSCR only works on investment properties. You can't live there. Bank statement loans cover primary, second homes, and investment properties. DSCR investors often have complicated tax returns showing losses — those returns would kill a bank statement approval.
Documentation timing differs too. Bank statement loans need consecutive monthly statements with no gaps. DSCR loans just need an appraisal showing market rent. Processing time is similar — 3 to 4 weeks for either product.
Choose bank statement if you're buying a home to live in or you have strong business income but complex tax returns. South Gate self-employed borrowers use this when they write off everything and show minimal taxable income.
Choose DSCR if you're adding another rental to your portfolio and the property cash flows. Your personal finances are irrelevant. This works for investors who already own several properties and can't qualify conventionally due to debt ratios.
Some borrowers qualify for both. In that case, run the numbers. Bank statement loans sometimes offer slightly better rates if your income is very strong and consistent.
Yes. Bank statement loans work for investment properties, but DSCR is usually simpler since it skips income verification entirely. Run both options if the rental cash flows well.
Rates are nearly identical, typically 1-2 points above conventional. Bank statement might edge ahead if you show very high deposits. Both are priced as non-QM products.
Neither requires tax returns for income calculation. Bank statement uses deposits. DSCR uses rental income. Some lenders pull returns to verify no recent bankruptcies.
Both start at 620, but you'll get better pricing at 680+. DSCR lenders sometimes accept 640 if the property has strong cash flow and you put 25% down.
Yes. Bank statement works for rate-term or cashout refis on any property. DSCR handles investment property refis and cashouts when you want to pull equity without income docs.
Both average 3-4 weeks. DSCR can close slightly faster since there's less income documentation to review. Bank statement needs every page of 12-24 months of statements verified.