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in Redlands, CA
Redlands real estate investors and self-employed professionals have two popular non-QM financing options. Bank Statement Loans and DSCR Loans both skip traditional income verification, but serve different purposes.
Understanding which loan type matches your situation can save time and streamline your financing. Both options open doors for borrowers who don't fit conventional lending boxes.
This guide compares these two non-QM products to help Redlands borrowers make informed decisions. We'll break down how each works and who benefits most.
Bank Statement Loans use 12 to 24 months of bank statements to verify income for self-employed borrowers. This approach bypasses tax returns, which often show lower income due to business deductions.
Self-employed professionals in Redlands—from consultants to contractors—can qualify using actual cash flow. Lenders analyze deposits to determine borrowing capacity.
These loans work for primary residences, second homes, and investment properties. Rates vary by borrower profile and market conditions.
DSCR Loans qualify investors based on a rental property's income rather than personal income. The Debt Service Coverage Ratio compares monthly rent to the mortgage payment.
Your personal employment and tax returns don't matter with DSCR financing. Only the property's ability to generate rental income counts for qualification.
Redlands real estate investors building portfolios appreciate this streamlined approach. DSCR Loans are strictly for investment properties, not primary residences. Rates vary by borrower profile and market conditions.
The main distinction is qualification method: Bank Statement Loans examine your personal cash flow, while DSCR Loans focus solely on property income. One looks at you, the other at the rental.
Bank Statement Loans work for any property type you'll use or rent. DSCR Loans only finance investment properties you won't occupy.
Self-employed borrowers buying personal homes need Bank Statement Loans. Investors who want to keep personal finances separate prefer DSCR Loans.
Both offer flexible underwriting compared to conventional mortgages. Your choice depends on whether you're buying for yourself or for investment income.
Choose Bank Statement Loans if you're self-employed and buying a home to live in. They're also good for self-employed investors who want one loan type for all properties.
DSCR Loans suit established investors adding to their Redlands portfolio. If you want personal income completely out of the equation, DSCR is your answer.
Consider your tax strategy too. Business owners with heavy write-offs benefit from bank statement verification showing actual deposits. Investors with strong rental income favor DSCR's property-focused approach.
Both programs serve San Bernardino County borrowers well. A mortgage professional can analyze your specific situation and recommend the best fit.
Yes, Bank Statement Loans work for investment properties if you're self-employed. DSCR Loans are investment-only but don't require personal income verification at all.
DSCR Loans are simpler if the property has strong rental income. Bank Statement Loans require more documentation but work for properties you'll occupy.
Non-QM loans typically carry slightly higher rates than conventional options. Rates vary by borrower profile and market conditions for both programs.
Most lenders want a DSCR of 1.0 or higher, meaning rent covers the mortgage payment. Some allow ratios as low as 0.75 with compensating factors.
Absolutely. Both Bank Statement and DSCR Loans are available for refinancing existing Redlands properties, following the same qualification guidelines.