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in Coronado, CA
Both loans skip tax returns, but they serve completely different borrowers. Bank statement loans verify your business income through deposits. DSCR loans ignore your income entirely and qualify you on rental cash flow.
In Coronado's tight rental and investment market, choosing the wrong product costs you weeks and a denied file. Most self-employed borrowers need bank statements. Most investors buying rental property need DSCR.
Bank statement loans analyze 12 to 24 months of deposits to calculate income. Lenders apply a percentage to average monthly deposits, typically 50% for business accounts or 100% for personal. This works for contractors, consultants, and business owners who write off most of their profit.
You still need decent credit and a down payment. Expect 620+ minimum credit score and 10-20% down depending on property type. Rates run 1-2% above conventional because the loan is non-QM.
DSCR loans qualify you on one metric: does the rental income cover the mortgage payment? Lenders want a ratio of 1.0 or higher, meaning rent equals or exceeds the full PITI payment. Your tax returns, W-2s, and personal income never enter the conversation.
This loan exists for investors building portfolios. You can close on a Coronado rental property without proving employment or providing paystubs. Expect 20-25% down and rates similar to bank statement loans.
Bank statement loans require your business income. DSCR loans require rental income from the property you're buying. If you're self-employed buying a primary residence, only bank statements work. If you're buying an investment property with strong rent, DSCR is cleaner.
Bank statement underwriting reviews your deposits for consistency and business legitimacy. DSCR underwriting orders an appraisal with rent schedule and divides projected rent by the mortgage payment. The processes don't overlap.
Use bank statements if you're self-employed and buying a home to live in. Use DSCR if you're buying a rental property and don't want to provide tax returns. A Coronado landlord with three rentals should use DSCR. A self-employed buyer wanting to live on Orange Avenue needs bank statements.
You can't mix these loans. DSCR requires the property to be rented out, so it won't work for a primary residence. Bank statements won't help if your personal income is low but the rental income is strong. Pick based on property use and income source.
Yes, but it's inefficient. Bank statement loans qualify you on your business income, not the rental income. DSCR is faster and doesn't require your tax returns.
They're similar, both running 1-2% above conventional. Rates vary by borrower profile and market conditions, but neither has a clear rate advantage.
Bank statements can go as low as 10% down for owner-occupied. DSCR typically requires 20-25% down since it's investment property.
Yes. Lenders use an appraiser's market rent estimate, not actual lease agreements. The property doesn't need a tenant at closing.
DSCR is usually quicker. Bank statement loans require detailed deposit analysis. DSCR just needs an appraisal with rent schedule and basic credit review.