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in Fontana, CA
Fontana homebuyers and investors have distinct financing needs. Conventional loans work well for primary residences, while DSCR loans serve real estate investors.
The right choice depends on how you plan to use the property. Personal income matters for conventional loans. Rental income matters for DSCR loans.
Both options are available in San Bernardino County. Each has unique qualification requirements and benefits worth understanding before you apply.
Conventional loans are traditional mortgages not backed by government agencies. They offer flexible terms and competitive rates for qualified borrowers. Rates vary by borrower profile and market conditions.
These loans typically require good credit and verifiable income documentation. Lenders review your W-2s, tax returns, and employment history. Down payments usually start at 3% to 5% for qualified buyers.
Conventional financing works best for owner-occupied homes in Fontana. You can use them for primary residences, second homes, or investment properties with personal income verification.
DSCR loans qualify investors based on rental property income rather than personal income. The Debt Service Coverage Ratio compares monthly rent to the mortgage payment. Rates vary by borrower profile and market conditions.
These non-QM loans skip W-2s and tax returns entirely. Lenders focus on whether the rental income covers the debt service. A DSCR of 1.0 or higher typically meets requirements.
DSCR financing is ideal for Fontana real estate investors building portfolios. Self-employed buyers and those with complex tax situations also benefit from this income-based approach.
The main difference is how you qualify. Conventional loans require personal income documentation and employment verification. DSCR loans only look at the property's rental income potential.
Down payment requirements also differ between these options. Conventional loans may accept 3% to 5% down for primary homes. DSCR loans typically require 20% to 25% down for investment properties.
Occupancy rules matter too. Conventional loans offer the best rates for owner-occupied homes. DSCR loans are specifically designed for rental properties you won't live in yourself.
Choose conventional financing if you're buying a primary residence in Fontana. This option offers lower rates and smaller down payments. You need stable employment and good credit to qualify.
Pick DSCR loans if you're investing in San Bernardino County rental properties. Your personal income doesn't matter with this approach. The rental income just needs to cover the mortgage payment.
Consider your tax situation and future plans too. Self-employed borrowers often prefer DSCR loans for their simplicity. Traditional W-2 employees usually get better terms with conventional financing.
No, DSCR loans are only for investment properties. They require the property to generate rental income. Use a conventional loan for your primary home instead.
Conventional loans typically offer lower rates for owner-occupied homes. DSCR loan rates are competitive for investors. Rates vary by borrower profile and market conditions.
Both loans require decent credit, but standards vary. Conventional loans prefer 620+ scores. DSCR loans may accept lower scores if the property income is strong.
Conventional loans may accept 3-5% down for primary homes. DSCR loans typically require 20-25% down. Larger down payments often improve your rate for both options.
Yes, you can use conventional financing for your home and DSCR for investments. Many buyers use both strategically. Each property is evaluated separately by lenders.