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in Del Mar, CA
Del Mar's housing market attracts both self-employed business owners and real estate investors who don't fit traditional lending boxes. Both bank statement and DSCR loans skip W-2 verification, but they solve different problems.
Bank statement loans work for entrepreneurs buying primary homes or second properties. DSCR loans exist purely for investment properties where rental income covers the mortgage.
Most Del Mar buyers choosing non-QM financing fall into one of two camps: established business owners who need a residence, or investors building portfolios in coastal San Diego County.
Bank statement loans use 12 to 24 months of business or personal deposits to calculate income. Lenders average your monthly deposits, apply a percentage (typically 50-75% depending on expenses), then qualify you based on that number.
You can buy a primary residence, second home, or investment property with bank statements. Most lenders require 10-20% down, with credit scores starting around 620 for strong profiles.
This loan makes sense for self-employed Del Mar buyers with solid cash flow but complex tax returns. If you write off significant business expenses, your bank deposits tell a better income story than your 1040.
DSCR loans ignore your personal income entirely. Underwriters look at one number: monthly rental income divided by monthly mortgage payment (PITI). A ratio above 1.0 means the property covers itself.
Most lenders require 20-25% down for DSCR loans in Del Mar. You can't use this loan for a primary residence — it's investment properties only, whether long-term rentals or vacation properties.
This option works for investors who own multiple properties or have irregular personal income. The property qualifies itself based on market rents, not what you report on tax returns.
Bank statement loans require proof of your income through deposits. DSCR loans don't care what you make personally — only what the property generates in rent.
Bank statements work for any property type you'll occupy or rent out. DSCR strictly finances investment properties, which means you can't live there as your primary home.
Down payments run slightly lower on bank statement loans (10-20%) versus DSCR (20-25%). But DSCR loans often close faster since underwriters don't analyze your business structure or personal cash flow patterns.
Rate pricing differs too. Bank statement loans price based on credit, down payment, and income documentation strength. DSCR loans price primarily on the debt coverage ratio and property type.
Choose bank statement loans if you're buying a home to live in or need flexibility to occupy the property. This works for Del Mar entrepreneurs, business owners, or self-employed professionals who want a primary residence without providing tax returns.
Pick DSCR if you're buying strictly as an investment and the rental income covers the payment. This makes sense for portfolio investors, out-of-state buyers, or anyone purchasing Del Mar rental property who doesn't want to document personal income.
Some borrowers actually qualify for both options. In that case, compare rates and terms — sometimes DSCR prices better for strong-performing rentals, while bank statement loans win for properties with lower rent-to-payment ratios.
Yes, bank statement loans work for investment properties, second homes, and primary residences. DSCR loans only finance investment properties.
DSCR loans typically close faster since underwriters only analyze rental income and property appraisal. Bank statement loans require more personal documentation review.
Most lenders want at least two years in business. Some accept 12-24 months of bank statements from newer businesses with strong cash flow.
Most lenders require 1.0 or higher, meaning rent covers the mortgage payment. Some allow ratios as low as 0.75 with larger down payments.
Yes, lenders can use business and personal accounts together. They'll average deposits across all accounts to calculate qualifying income.
Rates vary by borrower profile and market conditions. DSCR often prices better for properties with strong rent coverage and larger down payments.