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in Dos Palos, CA
Dos Palos investors face a clear choice: conventional financing that checks your W-2, or DSCR loans that only care about rental income. Your purchase purpose determines which path makes sense.
Most owner-occupants default to conventional loans for lower rates and standard terms. Investors building rental portfolios often need DSCR to avoid income verification headaches.
Conventional loans verify your job, income, and debt-to-income ratio through tax returns and pay stubs. You need strong personal credit and employment history to qualify.
Rates typically run 0.5-1% lower than DSCR options because lenders see less risk. You can put down as little as 3% for primary residences, though investors need 15-25% down.
DTI ratios max out around 50% with most lenders. Your personal income must cover all debts plus the new mortgage payment, regardless of rental potential.
DSCR loans qualify you based solely on the property's rental income divided by the mortgage payment. Lenders never ask for tax returns or employment verification.
You need the rent to cover 1.0-1.25x the full PITIA payment. Properties with strong rental comps sail through underwriting even if your personal income looks complicated.
Minimum down payments start at 20-25% for investment properties. Rates run higher than conventional but eliminate the income documentation maze entirely.
These work brilliantly for self-employed borrowers or investors with multiple properties who can't show clean DTI ratios. The property income does all the talking.
Rate spread matters. Conventional loans typically price 0.5-1.0% below DSCR loans because of stricter qualification. That difference costs real money over 30 years.
Documentation burden flips completely. Conventional requires two years tax returns, W-2s, and bank statements. DSCR needs a lease agreement and rent comparable data.
Occupancy drives the decision. Planning to live there? Conventional wins on rate and down payment. Pure investment property with messy personal income? DSCR makes more sense.
Choose conventional if you're buying a primary residence or have clean W-2 income with manageable DTI. The rate savings compound significantly over a 30-year term.
Go DSCR when you're acquiring investment properties and can't document traditional income cleanly. Self-employed investors and portfolio builders live in this space.
Some Dos Palos investors use conventional for their first rental then switch to DSCR once DTI ratios get tight. Rates vary by borrower profile and market conditions.
Yes, but you need 15-25% down and the property payment gets added to your DTI calculation. Your personal income must support all debts combined.
Credit requirements sit around 680-700 for DSCR versus 620-640 for conventional. DSCR lenders care more about property cash flow than credit score.
Just a lease agreement or rent appraisal showing market rent. No tax returns, W-2s, or employment verification required at all.
A 1% rate gap on $300k costs roughly $60k extra over 30 years. Calculate whether avoiding income docs justifies that premium.
Absolutely, once your income situation allows conventional qualification. Many investors refinance to capture lower rates when documentation becomes cleaner.