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in Chowchilla, CA
Both bank statement and DSCR loans serve Chowchilla borrowers who can't use W-2 income to qualify. The difference is what counts as income: your actual cash flow or a property's rental income.
Most self-employed buyers in Chowchilla need bank statement loans. Real estate investors buying rental properties need DSCR loans. If you're both, the property's numbers usually determine which works better.
Bank statement loans let self-employed borrowers prove income with 12 or 24 months of business or personal bank deposits. Lenders calculate income by averaging deposits, usually applying a 50% expense ratio unless you provide a CPA letter.
These work for Chowchilla contractors, truckers, farmers, and small business owners who write off most income. You need 10-20% down depending on credit score and property type. Rates run 1-2% higher than conventional.
Credit scores matter here. Most lenders require 680 minimum, though some accept 620 with larger down payments. Your bank statements must show consistent deposits without major red flags like frequent NSFs or bounced checks.
DSCR loans ignore your personal income completely. Lenders only care if the rental income covers the mortgage payment, taxes, insurance, and HOA fees. The property qualifies you, not your tax returns.
You need a DSCR ratio of at least 1.0, meaning rent equals expenses. Most lenders prefer 1.25 or higher. Lower ratios mean higher rates or bigger down payments. Investment properties only—no primary residences.
DSCR loans require 20-25% down for single-family rentals in Chowchilla. Credit score minimums start at 660, though 700+ gets better pricing. No income documentation, no employment verification, no tax returns.
Bank statement loans evaluate you as a borrower. DSCR loans evaluate the property as an investment. If you're buying a rental with strong rent numbers but messy personal finances, DSCR wins. If you're buying a primary home, bank statement is your only option.
Down payments differ too. Bank statement loans allow 10% down on primary homes. DSCR loans require 20-25% since they're investment-only. Bank statement loans need proof of self-employment. DSCR loans don't care what you do for work.
The income calculation separates them most. Bank statement lenders average your deposits and apply expense ratios. DSCR lenders run a simple rent-to-payment formula using an appraisal's market rent opinion. One looks backward at cash flow, the other forward at rental potential.
Choose bank statement loans when buying a primary home or second home in Chowchilla as a self-employed borrower. They're also better for investors whose rental properties don't generate enough rent to hit DSCR minimums but whose business income is strong.
Choose DSCR loans when buying investment property with solid rental income. They work especially well for borrowers with complex tax situations, multiple LLCs, or recent business launches that haven't built 12 months of clean bank statements yet.
Some Chowchilla investors qualify for both but pick DSCR because it's simpler. No hunting through bank statements for irregular deposits. No explaining business transactions. Just submit an appraisal and a lease or rent estimate.
Yes, bank statement loans work for investment properties if you want to use your business income to qualify. DSCR loans are often simpler for rentals since they ignore your personal finances entirely.
Rates are similar—both run 1-2% above conventional loans. DSCR loans with ratios above 1.25 sometimes price better than bank statement loans with complicated deposit patterns.
Some lenders allow it if you provide lease history or booking data. Others restrict DSCR to traditional long-term rentals only. Ask your broker before assuming it works.
Absolutely. Use bank statement for your primary residence and DSCR for rental properties. You can have multiple loans of different types at the same time.
DSCR loans close faster because they skip income verification. Bank statement loans need full underwriting of your deposits, which adds time if statements are messy.