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in Mammoth Lakes, CA
Mammoth Lakes buyers face a unique choice. Most properties here are vacation rentals or investment homes, not primary residences.
Conventional loans work great for owner-occupied buyers. DSCR loans dominate the investor market where rental income drives the deal.
The financing you pick changes your down payment, rate, and approval odds. Getting this wrong costs you thousands or kills the deal entirely.
Conventional loans are backed by Fannie Mae and Freddie Mac. They offer the lowest rates available if you're buying a primary or second home.
You'll need documented income, 620+ credit, and typically 5-15% down. Second homes require 10% minimum, investment properties need 15-20%.
These loans cap at $1,089,300 in Mammoth Lakes for 2024. Anything above that needs a jumbo loan with stricter requirements.
Rates stay competitive because these loans carry less risk. But approval hinges entirely on your personal income and debt-to-income ratio.
DSCR loans ignore your personal income completely. Lenders only care if the rental income covers the mortgage payment plus expenses.
The debt service coverage ratio needs to hit 1.0 or higher. That means rent must equal or exceed your PITIA payment.
You'll put down 20-25% minimum. Rates run 0.5-1.5% higher than conventional because these are portfolio loans with more flexibility.
No tax returns, no pay stubs, no employment verification. Perfect for self-employed investors or those buying multiple rental properties.
Income verification splits these loans completely. Conventional requires two years of tax returns and recent pay stubs. DSCR uses an appraisal's rent schedule.
Down payments differ by 5-10%. You might get a conventional second home at 10% down. DSCR won't go below 20%, often 25% for vacation rentals.
Rates favor conventional by a full point usually. But DSCR makes sense when your personal income won't support another mortgage payment.
Property type matters more with DSCR. Lenders want proven rental income. Unique Mammoth cabins may need stronger DSCR ratios than standard condos.
Pick conventional if you're buying a second home or have strong W-2 income. The rate savings over 30 years beat any DSCR advantage.
Choose DSCR when you're building a rental portfolio. After 4-6 financed properties, conventional lenders shut you down. DSCR never does.
Self-employed buyers in Mammoth often go DSCR even on first rentals. Writing off business expenses tanks your qualifying income for conventional.
Run the math both ways. A 1% higher rate on $600k costs $6,000 yearly. If conventional approval means restructuring your business income, DSCR wins.
No. DSCR requires the property to generate rental income. Second homes you occupy seasonally need conventional or jumbo financing instead.
Most lenders want 1.0 minimum, some accept 0.75 with higher rates. Short-term rental income often qualifies if your appraisal supports it.
Only on investment properties, not second homes. You'll need 15-20% down and the rental income may help your DTI depending on experience.
DSCR typically closes quicker. No income verification means less documentation and fewer delays from underwriting requests.
Yes. Many buyers start conventional, convert to rentals, then refinance DSCR to pull equity for the next property purchase.
Minimum 680 for most lenders, 700+ gets better rates. Conventional can go to 620 but second homes usually need 680 anyway.