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in La Mesa, CA
La Mesa investors and self-employed borrowers often hit a wall with conventional loans. These two non-QM options get around tax return requirements but serve completely different purposes.
Bank statement loans work for business owners buying a primary residence. DSCR loans work for investors who want the property income to qualify the deal.
Bank statement loans use 12 or 24 months of deposits to calculate your income. Most lenders apply a 50% expense ratio to your average deposits, though some go as low as 25% for certain businesses.
These work for self-employed borrowers buying a home they'll live in. You need 10-20% down depending on credit score, and rates run 1-2% higher than conventional loans.
Credit minimums sit around 620, but stronger files get better pricing. Personal and business bank statements both work, though personal accounts typically get cleaner underwriting.
DSCR loans ignore your personal income entirely. Underwriters divide the property's rental income by the mortgage payment to get a coverage ratio.
Most lenders want a 1.0 DSCR minimum, meaning rent covers the full payment. Some accept 0.75 ratios with larger down payments or stronger reserves.
Investment properties only, with 20-25% down as standard. Your credit score, assets, and the property cash flow determine approval—not your W-2 or 1099 income.
No employment verification, no tax returns, no DTI calculations. If the property pencils out, the loan gets approved.
The fundamental split is property use. Bank statement loans require you to live in the home. DSCR loans require you to rent it out.
Income verification differs completely. Bank statements prove your business generates deposits. DSCR uses an appraisal's rent schedule to show the property pays for itself.
Down payments lean heavier on DSCR loans—20% minimum versus 10-15% for bank statement deals. But DSCR loans skip all personal income documentation, which matters if your tax returns show heavy write-offs.
Rate pricing is comparable between both, usually 1.5-2.5% above conventional. DSCR loans with strong ratios sometimes beat bank statement pricing by 0.25-0.50%.
Choose bank statement loans if you're self-employed and buying a La Mesa home to live in. This includes business owners, 1099 contractors, and anyone with inconsistent paystubs.
Choose DSCR loans if you're buying a rental property and don't want your personal income scrutinized. This works especially well for high-earners with aggressive tax strategies.
Some borrowers need both. Use a bank statement loan for your primary residence, then DSCR loans to scale a rental portfolio without hitting DTI limits.
Neither loan cares about employment gaps or recent job changes. Both focus on cash flow—either yours or the property's.
No. Bank statement loans require owner occupancy. Investment properties need a DSCR loan or another investor product.
None. DSCR loans qualify entirely on the property's rental income versus the mortgage payment, not your personal earnings.
Rates run similar, typically 1.5-2.5% above conventional. Strong DSCR ratios sometimes beat bank statement pricing by 0.25-0.50%.
Yes. Use a bank statement loan for your primary home and DSCR loans for rental properties without affecting each other.
Both programs typically require 620 minimum. Higher scores unlock better rates and lower down payment options on both products.