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in Hollister, CA
Self-employed buyers and investors in Hollister face the same challenge: traditional lenders reject deals that don't fit W-2 income models. Bank Statement and DSCR loans both solve this problem, but they target completely different scenarios.
Bank Statement loans verify your personal income through deposits. DSCR loans ignore your income entirely and qualify you based on rental property cash flow. The right choice depends on whether you're buying to live in the property or purely as an investment.
Bank Statement loans analyze 12 or 24 months of personal or business bank deposits to calculate qualifying income. Lenders apply a percentage (typically 50% for personal accounts, 75% for business) to your average monthly deposits.
This works for self-employed borrowers buying primary homes, second homes, or investment properties in Hollister. You need consistent deposits, reasonable credit (usually 620+ minimum), and 10-20% down depending on property type.
DSCR loans qualify you based solely on the property's rental income versus its debt obligations. Lenders calculate a ratio: monthly rent divided by monthly mortgage payment (including taxes and insurance). A ratio above 1.0 means the rent covers the payment.
These loans only work for investment properties, never owner-occupied homes. Your personal income, tax returns, and employment don't matter. The property itself has to prove it can carry the mortgage through rental cash flow.
The fundamental split: Bank Statement loans verify your ability to pay using your income. DSCR loans verify the property's ability to pay using its rent. If you're buying a home to live in, DSCR isn't an option.
Rates vary by borrower profile and market conditions, but DSCR loans often price slightly higher because lenders accept more risk when personal income isn't verified. Bank Statement loans typically offer more flexibility on property type and can work for non-rental purchases.
Choose Bank Statement if you're self-employed and buying a primary residence, second home, or investment property where you need to prove personal income. This is the only path if you're not buying a pure rental.
Choose DSCR if you're buying an investment property in Hollister and want to avoid income verification entirely. This works best when the rental numbers are strong enough to carry the mortgage independently, especially if your tax returns show low income due to business write-offs.
Yes. Bank Statement loans work for investment properties, but you still need to prove personal income through deposits. If you want to avoid that, use DSCR instead.
Typically yes. DSCR loans usually require 20-25% down, while Bank Statement loans can go as low as 10% for owner-occupied properties.
DSCR often closes slightly faster since there's no personal income verification. Bank Statement loans require more documentation review of your deposit history.
Yes. DSCR works for both purchases and refinances. The property just needs sufficient rental income to cover the new mortgage payment.
Lenders average deposits over 12 or 24 months, smoothing volatility. Extremely irregular patterns may hurt qualifying income, but seasonal businesses can still work.