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in Torrance, CA
Torrance investors and self-employed buyers face a simple choice: qualify with your business income or qualify with rental income. Bank statement loans use your deposits. DSCR loans use the property's rent.
Most borrowers think they need W-2s to buy in South Bay. Both options skip tax returns and employment verification entirely. The right choice depends on whether you're living in the property or renting it out.
Bank statement loans run your deposits through a simple calculation: total deposits minus refunds, divided by 12 or 24 months. That's your qualifying income. No Schedule C. No profit and loss statements.
You need 12 months of statements minimum, though 24 months gets better rates. Lenders look for consistent deposits. Big swings month to month raise questions. Credit minimums run 620 to 680 depending on the lender.
DSCR loans never ask for your income. The underwriter pulls a rent estimate and divides it by the property's monthly payment. That ratio needs to hit 1.0 or higher — meaning rent covers the mortgage.
You can close with zero landlord experience. Most lenders allow LLCs on title. The property itself qualifies. Your job, business income, and tax returns stay completely out of the file.
Bank statement loans require you to live in the property or use it as a second home. DSCR loans only work for pure rentals. That's the biggest split. If you're buying on Anza Avenue to live there, DSCR is off the table.
Rate differences hit about 0.5% to 1%. Bank statement loans price higher because they underwrite your business volatility. DSCR loans price on the property's numbers, which lenders see as more stable. Both require 15% to 25% down depending on credit and property type.
Pick bank statements if you're self-employed and buying a primary residence in Torrance. Pick DSCR if you're adding a rental near Del Amo or Old Torrance and don't want to document income at all. Simple as that.
HousingWire just covered Rate's new RateFi product letting crypto holders use digital assets for non-QM qualification — that applies to bank statement loans but not DSCR. If you hold significant crypto, bank statements give you more flexibility to count those holdings as reserves.
Yes, but only if you plan to live there first or it's a second home. Pure investment properties require DSCR loans instead.
DSCR loans close quicker because there's less income documentation. Bank statements require 12-24 months of statements and underwriting review.
Yes. Both accept condos and single-family homes. Warrantable condo projects qualify easiest with either program.
Absolutely. DSCR refinances work great for pulling equity without documenting your personal income or business tax returns.
Most lenders average 12 or 24 months to smooth volatility. Consistent annual totals matter more than month-to-month spikes.