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in Alturas, CA
Self-employed professionals and real estate investors in Alturas face unique challenges when applying for traditional mortgages. Bank Statement Loans and DSCR Loans offer alternative paths to financing, each designed for different borrower types.
Both are non-QM (non-qualified mortgage) products that skip traditional W-2 income verification. The right choice depends on whether you're buying a primary residence or an investment property in Modoc County.
Bank Statement Loans analyze 12 to 24 months of business or personal bank deposits to determine your qualifying income. Lenders calculate an average monthly income from your deposits, making this ideal for self-employed borrowers with strong cash flow.
This option works well for Alturas business owners, contractors, or freelancers purchasing primary residences or second homes. You'll need consistent deposit history and typically a credit score of 620 or higher.
The process focuses on your actual business performance rather than tax returns, which often show reduced income due to deductions. Rates vary by borrower profile and market conditions, with down payments typically starting at 10-20%.
DSCR Loans qualify you based solely on the rental income your investment property generates. Lenders calculate the Debt Service Coverage Ratio by dividing monthly rental income by the monthly mortgage payment.
This financing option is exclusively for investment properties in Alturas and throughout Modoc County. Your personal income, employment status, and tax returns don't factor into the approval process at all.
A DSCR of 1.0 or higher means the property breaks even, while ratios above 1.25 typically qualify for better terms. Rates vary by borrower profile and market conditions, with down payments generally starting at 20-25%.
The fundamental difference lies in what income gets evaluated. Bank Statement Loans examine your personal or business cash flow, while DSCR Loans look only at the investment property's rental income potential.
Property type determines eligibility too. Bank Statement Loans work for primary residences, second homes, and investment properties. DSCR Loans are strictly for rental investment properties where you won't live.
Documentation requirements differ significantly. Bank Statement borrowers provide months of bank statements and potentially business licenses. DSCR borrowers need a lease agreement or rental market analysis instead of personal income documents.
Choose Bank Statement Loans if you're self-employed and buying a home to live in around Alturas. This works when your bank deposits show strong income but your tax returns don't reflect your true earning power.
Select DSCR Loans when purchasing rental properties in Modoc County and want to qualify based on the property's numbers alone. This option shines when you have multiple investment properties or prefer keeping personal finances separate from investment decisions.
Many investors use both loan types strategically—Bank Statement Loans for personal residences and DSCR Loans for building rental portfolios. Working with a local mortgage broker helps you determine which path makes the most financial sense for your situation.
Yes, Bank Statement Loans work for investment properties, but you'll still qualify based on your personal income from bank deposits. DSCR Loans often make more sense for pure rental investments since they use the property's income instead.
Rates vary by borrower profile and market conditions for both loan types. Neither consistently offers lower rates—your credit score, down payment, and overall financial picture determine your specific rate.
Bank Statement Loans typically start at 10-20% down, while DSCR Loans generally require 20-25% minimum. The exact requirement depends on your credit profile and the specific lender's guidelines.
Yes, you can use Bank Statement Loans for your personal residence and DSCR Loans for rental properties at the same time. Many investors leverage both products to build their real estate portfolios.
DSCR Loans are often simpler since they ignore personal income entirely—only the property numbers matter. Bank Statement Loans require consistent deposit history and can be more documentation-intensive for self-employed borrowers.