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in Laguna Beach, CA
Laguna Beach offers unique financing challenges for both self-employed professionals and real estate investors. Two non-QM loan options help borrowers who don't fit traditional mortgage requirements.
Bank Statement Loans serve self-employed borrowers who need income verification through deposits. DSCR Loans help investors qualify based solely on rental property cash flow. Understanding each option helps you choose the right path.
Bank Statement Loans use 12 to 24 months of bank statements to verify income for self-employed borrowers. This option works well for business owners, freelancers, and contractors in Laguna Beach.
Instead of tax returns and W-2s, lenders review your bank deposits to calculate income. This approach helps self-employed borrowers whose tax deductions reduce their reported income. Rates vary by borrower profile and market conditions.
DSCR Loans qualify investors based on a rental property's income rather than personal income. The property must generate enough rent to cover the mortgage payment and other costs.
Lenders calculate the Debt Service Coverage Ratio by dividing rental income by monthly debt obligations. Your personal income and employment don't factor into approval. This makes DSCR Loans ideal for building a rental portfolio in Orange County. Rates vary by borrower profile and market conditions.
The main difference lies in who benefits from each loan type. Bank Statement Loans help self-employed buyers purchase primary residences or vacation homes. DSCR Loans are strictly for investment properties that generate rental income.
Income verification differs significantly between these options. Bank Statement Loans require your personal bank deposits over 12-24 months. DSCR Loans only examine the subject property's rental income potential. Your employment history matters for Bank Statement Loans but not DSCR Loans.
Both offer flexible underwriting compared to conventional mortgages. Neither requires traditional income documentation like W-2s or tax returns. This flexibility makes both popular in Laguna Beach's competitive market.
Choose Bank Statement Loans if you're self-employed and buying a home to live in. This works for entrepreneurs, consultants, and small business owners who show strong deposits. Your business income supports your lifestyle and mortgage payment.
Select DSCR Loans if you're an investor focused on cash flow properties. Your personal income doesn't matter—only the rental numbers. This option helps investors scale their portfolio without income limitations. Consider your goals: personal homeownership or investment growth.
Yes, Bank Statement Loans work for investment properties and primary residences. However, DSCR Loans often provide better terms for pure investment purchases since they focus on property income.
Rates vary by borrower profile and market conditions for both options. Your credit score, down payment, and loan specifics determine your rate more than the loan type itself.
Neither requires perfect credit, but higher scores improve your terms. Most lenders want credit scores above 620, though some accept lower scores with larger down payments.
Both typically require 15-25% down, higher than conventional loans. Investment properties through DSCR often need 20-25%, while Bank Statement Loans may accept 15-20% down.
Yes, if you meet each loan's specific criteria. You could use a Bank Statement Loan for your residence and DSCR Loans for rental properties in your investment portfolio.