Question 1

Can I use a DSCR loan for a vacation rental in Encinitas?

Accepted Answer

Yes. Many lenders accept short-term rental income for DSCR calculations. You'll need documented rental history or a market rent appraisal.

Question 2

Do DSCR loans require tax returns?

Accepted Answer

No tax returns required. The lender qualifies the property on rental income, not your personal earnings.

Question 3

Which loan has a lower down payment?

Accepted Answer

Conventional wins here. You can put down as little as 5%. DSCR loans typically require 20-25% down.

Question 4

Are DSCR rates higher than conventional rates?

Accepted Answer

Yes. DSCR rates run higher because lenders take on more risk. Rates vary by borrower profile and market conditions.

Question 5

Can a self-employed borrower use a conventional loan?

Accepted Answer

Yes, but lenders will average two years of tax returns. If write-offs reduce your stated income, DSCR may qualify you for more.

Question 6

What credit score do I need for a DSCR loan?

Accepted Answer

Most lenders want 620-680 minimum for DSCR. Higher scores get better rates and terms.

Conventional vs DSCR Loans in Encinitas