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in San Bernardino, CA
San Bernardino buyers have two strong mortgage options. Conventional loans work well for owner-occupied homes and standard purchases. DSCR loans help real estate investors qualify based on rental income instead of personal earnings.
Each loan type serves different needs and goals. Understanding the key differences helps you choose the right financing. Your situation determines which option makes the most sense.
Conventional loans are traditional mortgages not backed by government agencies. They offer flexible terms and competitive rates for qualified borrowers. These loans work for primary homes, second homes, and investment properties.
Lenders review your credit score, income, and employment history. You typically need a down payment of at least 3% to 20%. Rates vary by borrower profile and market conditions, rewarding those with stronger credit.
DSCR loans qualify investors based on rental property income rather than personal income. The debt service coverage ratio compares monthly rent to mortgage payments. Lenders focus on whether the property generates enough income to cover its costs.
These non-QM loans help self-employed investors and those with complex tax returns. You can qualify without providing W-2s or tax returns. This makes DSCR loans ideal for building a rental property portfolio in San Bernardino.
The main difference is how you qualify. Conventional loans require proof of personal income through pay stubs and tax returns. DSCR loans only look at the rental property's income potential.
Conventional loans typically offer lower interest rates for strong borrowers. DSCR loans may have higher rates but provide easier qualification for investors. Down payment requirements also differ, with DSCR loans usually requiring 20% to 25% down.
Conventional loans limit how many financed properties you can own. DSCR loans have no such restrictions, letting you grow your portfolio. This flexibility matters for serious investors in San Bernardino County.
Choose conventional loans if you have steady W-2 income and good credit. They work best for primary residences and offer the lowest rates. First-time buyers and traditional employees benefit most from this option.
Pick DSCR loans if you're investing in rental properties in San Bernardino. They're perfect for self-employed borrowers or those with multiple properties. The income-based qualification makes portfolio growth easier without personal income limits.
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 qualified borrowers. DSCR loans have slightly higher rates due to their flexible qualification. Rates vary by borrower profile and market conditions.
Conventional loans generally require credit scores of 620 or higher. DSCR loans may accept lower scores if the property income is strong. Each lender sets their own requirements.
Conventional loans can require as little as 3% down for owner-occupied homes. DSCR loans typically need 20% to 25% down for investment properties in San Bernardino.
Conventional loans limit you to financing 10 properties total. DSCR loans have no such cap, making them better for growing a large portfolio. This matters for active investors.