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in Fort Bragg, CA
Fort Bragg investors face a clear fork: conventional loans work if you have W-2 income and solid DTI. DSCR loans ignore your tax returns and qualify you on rental income alone.
The choice reshapes your entire buying strategy. Conventional gets you lower rates and easier refinancing. DSCR lets you scale a portfolio without income documentation limits.
Conventional loans require W-2s, tax returns, and a debt-to-income ratio under 50%. You'll need 620+ credit for investment properties, 15-25% down, and full income documentation.
Fort Bragg vacation rental buyers often hit DTI walls here. If you own two properties already, your existing mortgages eat into qualifying income even if those rentals cash flow.
DSCR loans skip personal income entirely. Lenders calculate monthly rent divided by monthly payment—if that ratio hits 1.0 or higher, you're approved regardless of W-2 income.
Fort Bragg vacation rental owners love this. You can close on a coastal property using projected rental income from Airbnb comps. No tax returns. No DTI calculations. Just cash flow math.
Rate spread runs 1-2% higher on DSCR loans. You're paying for the privilege of no income docs. Conventional gets you 6.5% while DSCR might be 7.75%.
The approval path diverges completely. Conventional scrutinizes your employment history and debt load. DSCR only cares if rent covers the mortgage payment. Tax loss harvesting that kills conventional deals won't touch DSCR approval.
Use conventional if you're buying your first Fort Bragg rental and have clean W-2 income. The rate savings over 30 years dwarf the documentation hassle.
Switch to DSCR when you hit DTI limits or own multiple properties. Fort Bragg vacation rental investors typically go conventional on property one, then DSCR for properties two through ten. Self-employed buyers with write-offs go straight to DSCR.
Yes. Lenders use rental comps or appraisal income estimates to calculate DSCR. Coastal vacation rental projections work for qualification.
Usually. DSCR typically needs 20-25% down while conventional investment loans allow 15% down with higher rates or MI.
Both. Rental income helps if documented on tax returns. But existing mortgages increase your DTI and may block new approvals.
Yes, once you have 12+ months of rental income documented. Most investors refinance to conventional rates after seasoning the property.
Lenders use annualized income estimates. Summer peak months and winter lulls average out in the cash flow calculation.