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in Colfax, CA
Colfax investors and self-employed borrowers face a choice between two non-QM paths. Bank statement loans verify income through deposits, while DSCR loans ignore your income entirely.
Both skip tax returns and W-2s. The difference is what they measure instead—your cash flow or the property's rental income.
Most Placer County borrowers pick the wrong one because they don't understand which income source lenders actually evaluate.
Bank statement loans use 12 to 24 months of business or personal bank statements to calculate income. Lenders average your deposits and apply an expense ratio—typically 25% to 50%.
You need a 620+ credit score and 10-20% down. Rates run 1-2% higher than conventional loans because of the added underwriting risk.
This works for Colfax contractors, real estate agents, and small business owners who write off most income. Your deposits prove earnings capacity even when tax returns show low net income.
DSCR loans qualify based on rental property income divided by the monthly mortgage payment. A ratio above 1.0 means the rent covers the debt—that's all underwriters check.
Your personal income doesn't appear anywhere in the file. No pay stubs, no bank statements, no tax returns about you.
Colfax investors use these to scale portfolios without income caps. You can close 10 properties in a year without hitting debt-to-income limits that kill traditional mortgages.
Bank statement loans verify your income. DSCR loans verify the property's income. That's the entire decision tree.
If you're buying a primary residence in Colfax, you need bank statement. DSCR only works for investment properties—no exceptions.
Bank statement loans let you use the property however you want. DSCR requires a signed lease and rental income from day one.
Credit and down payment requirements overlap, but DSCR often accepts lower scores if the rental income is strong enough.
Choose bank statement if you're self-employed and buying your Colfax home. This is the only non-QM path for owner-occupied properties.
Choose DSCR if you're buying rental property and want to avoid income documentation entirely. Especially useful if you already own multiple rentals or have complex tax situations.
Some investors use both—bank statement for their primary, DSCR for their rental portfolio. We see this often with Placer County real estate agents who live in one property and rent others.
No. DSCR loans require investment properties with rental income. Use bank statement loans for owner-occupied homes.
Rates are similar—both run 1-2% above conventional. DSCR may price slightly better if the property has strong rental income and high DSCR ratio.
No. Both are non-QM products that skip tax returns entirely. Bank statement uses deposits, DSCR uses rental income.
Yes. You can use bank statement for your primary and DSCR for investment properties simultaneously if you qualify for both.
Bank statement typically requires 620+. DSCR may accept lower scores if the property's rental income is strong enough to offset risk.
Both take 3-4 weeks. DSCR can be faster since there's less income documentation to verify and review.