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in Fort Bragg, CA
Fort Bragg's coastal rental market attracts two types of borrowers with income outside the W-2 box. Self-employed locals need bank statement loans to buy primary residences or vacation properties.
Out-of-area investors buying rental properties here use DSCR loans that ignore personal income entirely. Both are non-QM products, but they solve completely different problems.
Bank statement loans work for self-employed borrowers who can't show traditional tax returns. You submit 12 or 24 months of business or personal bank deposits.
Lenders calculate income from your average monthly deposits, often applying a 50% expense ratio. This works well for Fort Bragg contractors, property managers, and small business owners with steady cash flow.
You can buy a primary home, second home, or investment property. Rates run 1-2% above conventional, and most programs require 10-20% down depending on credit strength.
DSCR loans ignore your personal income completely. Approval hinges on one number: the property's rental income divided by its total monthly debt.
A DSCR of 1.0 means rent covers the mortgage payment exactly. Most lenders want 1.1 to 1.25, meaning rent exceeds the payment by 10-25%.
These loans shine for investors with multiple properties or high earners who don't want employment verification. You can close in your LLC, and some lenders allow interest-only payments.
Bank statement loans care about your income. DSCR loans care about the property's income. That's the whole game.
If you're self-employed buying a home to live in, bank statement is your only path. If you're buying a rental and don't want to show tax returns, DSCR wins every time.
Down payments differ too. Bank statement loans start at 10% down for strong profiles. DSCR loans typically require 20-25% down, though some go to 15% for excellent credit and strong rent ratios.
Choose bank statement loans if you're self-employed and buying a primary residence or second home in Fort Bragg. You need stable deposits for 12-24 months and decent credit.
Pick DSCR if you're buying a rental property and want to avoid income documentation entirely. This works whether you're a W-2 employee, business owner, or retiree with multiple rentals.
Fort Bragg vacation rentals can work for either loan type. Bank statement if it's your beach house with occasional rental income. DSCR if it's a pure investment property you'll never occupy.
Yes, you could use a bank statement loan for your primary home and DSCR loans for rental properties. Each loan evaluates differently based on the property's purpose.
Rates vary by borrower profile and market conditions. Bank statement loans typically price slightly better than DSCR for similar credit and down payment scenarios.
Both can work, but DSCR is cleaner for pure investment properties. Bank statement loans require you to qualify based on all your income, not just the rental.
DSCR loans never require personal tax returns. Bank statement loans skip tax returns but need 12-24 months of bank deposits instead.
Bank statement loans start at 10% down for strong borrowers. DSCR loans typically require 20-25% down, sometimes 15% with excellent credit.