Question 1

Can I use a DSCR loan to buy a primary home?

Accepted Answer

No. DSCR Loans are for investment properties only. For a primary residence, you'd need a Bank Statement Loan or a conventional product.

Question 2

What DSCR ratio do lenders typically want?

Accepted Answer

Most lenders want a ratio of 1.0 or higher — meaning rent covers the full mortgage payment. Some go as low as 0.75 with compensating factors.

Question 3

Do Bank Statement Loans work for rental properties too?

Accepted Answer

Yes. Self-employed investors can use bank statements to qualify for a rental purchase. It's a valid alternative when DSCR ratios fall short.

Question 4

Which loan has the lower interest rate?

Accepted Answer

Both are Non-QM loans and carry higher rates than conventional financing. Rates vary by borrower profile and market conditions.

Question 5

How many months of bank statements do I need?

Accepted Answer

Lenders typically want 12 to 24 months. Using 24 months usually produces a more stable average, which can help borderline borrowers.

Question 6

Can a self-employed investor use either loan type?

Accepted Answer

Yes. If the rental income covers the DSCR threshold, that's simpler. If not, bank statements become the backup to prove personal income.

Bank Statement vs DSCR Loans in Mission Viejo