Loading
in Corte Madera, CA
Corte Madera investors face a choice: use conventional financing with personal income verification or leverage DSCR loans based purely on rental cash flow. The right answer depends on whether you're buying as an owner-occupant or building a rental portfolio.
Conventional loans offer lower rates and better terms for traditional buyers. DSCR loans ignore your W-2 and tax returns entirely, making them powerful for self-employed investors or those with complex income structures.
Conventional loans are the workhorse of residential financing. Lenders verify your W-2 income, pull tax returns, and measure debt-to-income ratios. You get access to the lowest rates available because you're presenting traditional employment proof.
For primary residences in Corte Madera, conventional financing typically requires 3-5% down for qualified buyers. Investment properties need 15-25% down. Rates vary by borrower profile and market conditions, but conventional pricing beats most alternatives.
Credit standards are straightforward: 620 minimum for most programs, though 740+ gets you the best pricing. Lenders want two years of steady employment and clean documentation of all income sources.
DSCR loans flip the qualification model. Lenders calculate whether the rental income covers the mortgage payment plus property costs. Your personal income never enters the equation.
The formula is simple: monthly rent divided by monthly housing expense (PITIA). Most lenders want a 1.0 DSCR minimum, meaning rent equals or exceeds the full payment. Some allow 0.75 DSCR if you bring more cash down.
Expect 20-25% down minimum on Marin County properties. Rates run 1-2% higher than conventional because you're using non-QM financing. Credit minimums sit around 660-680, though some lenders go lower with larger down payments.
The documentation gap is massive. Conventional loans require two years of tax returns, recent pay stubs, W-2s, and asset statements. DSCR loans need a lease agreement and property appraisal. That's it.
Rate difference typically runs 1-2 percentage points. If conventional investor rates sit around 7%, DSCR pricing lands near 8-9%. On a $1.2M Corte Madera property, that's roughly $1,000-$1,500 more per month.
Conventional loans cap your investor portfolio at 10 financed properties. DSCR lenders don't count existing mortgages the same way, making them essential for serious portfolio growth beyond that threshold.
Choose conventional if you're buying a primary residence or have clean W-2 income. The rate savings compound to hundreds of thousands over a 30-year mortgage. No reason to pay DSCR premiums when you qualify traditionally.
DSCR makes sense for three scenarios: you're self-employed with legitimate write-offs that crater your taxable income, you're past the 10-property conventional limit, or you need to close fast without income verification delays.
For Corte Madera investment properties with strong rental comps, DSCR loans often approve faster. No underwriter is debating whether your 1099 income counts or how to average fluctuating commissions.
No. DSCR loans only finance investment properties with rental income. Primary residences require conventional, FHA, or other owner-occupant programs.
Most lenders want 1.0 minimum, meaning rent equals the full mortgage payment. Some accept 0.75 DSCR with 25-30% down and strong credit.
No. DSCR lenders don't enforce Fannie/Freddie's 10-financed property cap. You can scale your portfolio beyond conventional financing limits.
DSCR typically closes in 21-30 days versus 30-45 for conventional. Less documentation means fewer underwriting delays on income verification.
Yes. You can refinance a DSCR loan to conventional once you're ready to provide income documentation. This captures lower rates after initial acquisition.