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in Larkspur, CA
Larkspur investors face a clear choice: conventional financing or rental income-based qualification. Your employment type and property plans determine which path makes sense.
Conventional loans reward W-2 earners with lower rates. DSCR loans let the property's rent carry the approval, no tax returns needed.
Conventional loans require proof of personal income through W-2s or tax returns. You'll typically need 620+ credit and 15-25% down for investment properties.
Rates beat most alternatives by 0.5-1%. Lenders cap your debt-to-income ratio at 43-50%, which limits how many properties you can finance this way.
Fannie Mae allows up to 10 financed properties. But each new mortgage factors into your DTI calculation, eventually blocking approvals even if properties cash flow.
DSCR loans ignore your W-2, tax returns, and employment entirely. Approval hinges on one number: rental income divided by the mortgage payment.
You need a DSCR of 1.0 or higher, meaning rent covers the full payment. Some lenders accept 0.75 if you put more down or have strong credit.
Rates run 0.75-1.5% higher than conventional. That's the trade-off for unlimited scalability and zero income documentation.
Conventional loans verify your job and tax returns. DSCR loans order an appraisal with rent schedule and ignore your employment completely.
Rate difference matters on Marin County prices. A 0.75% spread on $1.2M costs $9,000 annually, but DSCR lets you buy unlimited properties without DTI walls.
Conventional loans cap at 10 financed properties and pile debt ratios. DSCR loans have no portfolio limits if each property's rent covers its payment.
Use conventional for your first Larkspur rental if you have W-2 income and clean tax returns. The rate savings outweigh everything until you hit DTI limits.
Switch to DSCR when you can't qualify conventionally anymore or when documenting income creates problems. Self-employed investors often start here on property one.
Serious portfolio builders eventually need DSCR. You can't scale past 4-5 conventional mortgages without massive income, even if every property prints cash.
Yes, DSCR loans work on 1-4 unit properties. The rent must cover the mortgage payment with a 1.0 or higher debt service coverage ratio.
Conventional loans offer rates 0.75-1.5% lower than DSCR. Rates vary by borrower profile and market conditions.
No. DSCR loans qualify on rental income alone with no W-2s or tax returns needed for approval.
Fannie Mae caps conventional financing at 10 properties. Your debt-to-income ratio typically blocks you before hitting that limit.
Conventional investment loans require 15-25% down. DSCR loans typically need 20-25% depending on credit and DSCR ratio.
Absolutely. Most investors use conventional for early purchases, then switch to DSCR as they scale beyond DTI constraints.