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in Lemon Grove, CA
Both Bank Statement and DSCR loans serve borrowers who don't fit conventional guidelines, but they solve different problems. One qualifies you based on your business cash flow, the other on rental income from the property itself.
Lemon Grove investors and self-employed buyers often need one of these programs. The right choice depends on whether you're buying a primary residence or investment property and how you prefer to document income.
Bank Statement loans use 12 or 24 months of personal or business bank deposits to calculate qualifying income. Lenders apply a percentage to your average monthly deposits, typically 50-75% depending on whether you're a sole proprietor or S-corp.
This program works for self-employed borrowers buying primary residences, second homes, or investment properties in Lemon Grove. You avoid tax returns entirely—the bank statements show your actual cash flow, not your taxable income.
Expect rates 1-2% higher than conventional and minimum credit scores around 620-660. Most lenders require 10-20% down for owner-occupied purchases, 20-25% for investment properties.
DSCR loans qualify you based on rental income divided by the mortgage payment—no personal income verification at all. If the property's rent covers 100-125% of the PITIA payment, you can get approved regardless of your W-2 or 1099 income.
This is an investor-only program. You cannot use DSCR for a primary residence or second home in Lemon Grove. The property must be rented or generate rental income to qualify.
DSCR loans typically require 20-25% down and credit scores above 640. Rates run slightly higher than Bank Statement loans because lenders rely solely on the asset's performance, not your personal financial strength.
The biggest split: Bank Statement loans use your income, DSCR loans use the property's income. If you're buying a Lemon Grove home to live in, Bank Statement is your only option between these two. DSCR doesn't allow owner occupancy.
Bank Statement borrowers need consistent deposits over 12-24 months. DSCR borrowers need rental income that clears the debt service ratio threshold. One looks backward at your business performance, the other projects forward based on market rent.
Rates and terms overlap heavily—both sit in the non-QM space with pricing 1-2.5% above conventional. DSCR sometimes edges higher because there's no personal income backstop if the property sits vacant.
Choose Bank Statement if you're self-employed and buying a home to live in, or if you're an investor who wants one loan program for multiple property types. It gives you flexibility across primary, second, and investment purchases in Lemon Grove.
Go with DSCR if you're buying rental property and want the simplest approval process. No tax returns, no bank statements, no employment verification—just a rent analysis and appraisal. This works especially well for borrowers with complex income or those building portfolios quickly.
Some investors qualify for both programs on the same Lemon Grove rental. Run the numbers both ways—occasionally Bank Statement delivers better pricing if your deposits are strong, even though DSCR is easier to document.
No. DSCR requires the property to be 100% investment use. If you occupy it at all, even seasonally, you need a different program like Bank Statement.
They're close, usually within 0.25-0.50% of each other. Bank Statement sometimes prices better if you show strong deposits and good credit. Rates vary by borrower profile and market conditions.
Yes. Both Bank Statement and DSCR work for refinances with cash out, subject to LTV limits and seasoning requirements.
Bank Statement typically starts at 620-660. DSCR usually requires 640 minimum, though some lenders go to 620 with larger down payments.
Unlikely. Most lenders require 6-12 months of reserves for both programs, especially on investment properties in San Diego County.