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in Sausalito, CA
Sausalito's waterfront condos and hillside homes attract two types of buyers: people who want to live here and investors chasing rental income. These two loan types serve completely different purposes.
Conventional loans care about your W-2 income and credit. DSCR loans ignore your tax returns entirely and underwrite the property's rental cash flow instead.
Conventional loans are what most people use to buy a primary residence. You need solid credit (typically 620+), stable employment, and verifiable income through W-2s or tax returns.
Rates are competitive, and you can put down as little as 3% on a primary home. These loans follow strict debt-to-income caps, usually around 43-50%. Sausalito's high prices mean your income needs to support that monthly payment.
You'll get better terms than almost any other loan type if you qualify. Lower rates, lower fees, and the option to drop PMI once you hit 20% equity.
DSCR loans don't care what you earn. They underwrite the property's ability to cover its own mortgage payment through rental income. If the rent exceeds the debt service, you're approved.
Expect 20-25% down and higher rates than conventional. These are investment-only loans, so you can't live in the property. Lenders calculate a debt service coverage ratio—most want 1.0 or higher, meaning rent equals or exceeds the mortgage payment.
Perfect for self-employed borrowers who show minimal income on tax returns or investors adding their fifth, sixth, or tenth rental. No income verification, no employment letters, no tax transcripts.
The underwriting split is total. Conventional loans measure your ability to pay. DSCR loans measure the property's ability to pay. You can make $40K a year and still get approved for a million-dollar rental if the numbers work.
Conventional loans offer lower rates but strict income documentation. DSCR loans cost more upfront—higher rates, bigger down payments—but skip all personal income checks. One serves homeowners, the other serves landlords.
Buying a home to live in? Conventional wins every time if you qualify. Better rates, lower down payments, easier to manage. Sausalito's high prices already stretch budgets—don't pay DSCR rates if you don't have to.
Buying a rental property or vacation home you'll rent out? DSCR works if you're self-employed or maxed out on conventional loans. It's also the move if your tax returns show minimal income but you've got cash and solid credit.
Some investors use DSCR even when they could qualify conventionally just to avoid tying up debt-to-income ratio for future deals. If you're building a rental portfolio in Marin, preserving DTI capacity matters.
Only if you live there as your primary residence. Pure investment properties require 15% down minimum and higher rates on conventional loans. DSCR is often easier.
Most lenders want rent to equal or exceed your mortgage payment (1.0 DSCR). Higher ratios get better pricing. We use market rent estimates if the property is vacant.
Yes, if you can document rental income potential. Some lenders accept short-term rental projections. Sausalito has strict STR rules, so verify local regulations first.
DSCR often closes quicker since there's no income verification. No waiting on tax transcripts or employment letters. Expect 21-30 days versus 30-45 for conventional.
Yes, investors do this to pull equity or simplify documentation. You'll pay higher rates, so run the numbers. Makes sense if you need cash out or are consolidating rental properties.