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in Madera, CA
Most Madera borrowers don't fit the W-2 employee mold that traditional lenders expect. Self-employed business owners and real estate investors need different qualification paths.
Bank statement loans verify income through deposits. DSCR loans ignore your personal income entirely. Both work in Madera, but they solve different problems.
Bank statement loans use 12 or 24 months of personal or business bank deposits to calculate income. Lenders average your deposits and apply a percentage (typically 50-75%) as qualifying income.
These work for contractors, small business owners, and self-employed professionals buying primary homes or investment properties. You need consistent deposits and credit scores starting around 620.
DSCR loans qualify you based solely on the rental property's cash flow. Lenders divide the monthly rent by the mortgage payment to calculate the debt service coverage ratio.
You don't provide tax returns or prove personal income. The property either covers its own debt or it doesn't. Most lenders want a DSCR of at least 1.0, though some accept 0.75 with compensating factors.
Bank statement loans care about your income documentation. DSCR loans don't look at your income at all. That's the fundamental split between these programs.
Use bank statements when you're buying a primary home or your rental income alone won't support the loan. Use DSCR when you want to keep personal finances separate or own multiple properties without income limitations.
Choose bank statement loans if you're self-employed and buying a home to live in. Also use them for investment properties when the rent won't fully cover the mortgage but your business income can supplement.
Choose DSCR loans when you're scaling a rental portfolio and don't want each new property counted against your debt-to-income ratio. These work especially well for borrowers who already own multiple rentals or show limited income on tax returns.
Yes, bank statement loans work for investment properties. You'll typically need a larger down payment (20-25%) compared to a primary home purchase.
Lenders use either current lease agreements or a third-party rent appraisal. They don't consider your personal income at all for qualification.
Rates vary by borrower profile and market conditions. DSCR loans often have slightly higher rates due to investment property risk and no personal income verification.
Yes, many investors use bank statement loans for properties with weak cash flow and DSCR for strong performers. Match the loan to each property's situation.
Neither requires tax returns or W-2s. Bank statement loans need 12-24 months of statements. DSCR loans need rent documentation and a property appraisal.