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in Santee, CA
Santee investors face a clear choice when financing rental properties. Conventional loans work best for owner-occupants and buyers with strong W-2 income. DSCR loans qualify you based solely on the property's rental income.
Each loan type serves different needs in San Diego County's competitive market. Your income structure and property goals determine which option saves you money and speeds up closing.
Conventional loans offer the lowest rates and fees for qualified borrowers. You'll need documented income, strong credit, and typically 15-20% down for investment properties. These loans follow Fannie Mae and Freddie Mac guidelines.
The approval process reviews your debt-to-income ratio, employment history, and credit profile. You can finance up to 10 properties with conventional financing. Rates vary by borrower profile and market conditions, but typically beat non-QM options by 1-2%.
DSCR loans skip personal income verification entirely. Lenders approve you based on the property's rental income divided by the monthly mortgage payment. A DSCR of 1.0 or higher means the rent covers the payment.
Perfect for self-employed investors, business owners, or those with complex tax returns. You can close faster since there's no employment verification or tax return analysis. Down payments start at 20-25%, and you can finance unlimited properties.
The property becomes the borrower, not you. This means easier qualifying but slightly higher rates than conventional loans. Rates vary by borrower profile and market conditions.
Income verification separates these loan types completely. Conventional lenders review two years of tax returns, W-2s, and pay stubs. DSCR lenders only need a lease agreement or rent appraisal.
Rates and fees differ significantly. Conventional loans offer lower rates but require extensive documentation. DSCR loans cost more upfront but save time and hassle for investors with non-traditional income.
Property limits matter for serious investors. Conventional financing caps at 10 properties total. DSCR programs have no limit, making them essential for building larger portfolios in Santee and throughout San Diego County.
Choose conventional if you have W-2 income, clean tax returns, and want the lowest rate. This works well for first-time investors or those buying 1-4 rental properties in Santee.
Pick DSCR if you're self-employed, write off substantial business expenses, or already own multiple properties. The higher rate often matters less than the ability to qualify and close quickly.
Many Santee investors use both strategies. Start with conventional for your first few properties, then switch to DSCR as your portfolio grows and income becomes more complex.
Yes, DSCR loans work for first-time investors. You need 20-25% down and the property must generate enough rent to cover the mortgage payment. No previous landlord experience required.
DSCR loans typically close 5-7 days faster since there's no income verification. Conventional loans need employment checks and tax return reviews, adding time to the process.
Yes, both require cash reserves. Conventional typically needs 6 months of payments. DSCR lenders often require 6-12 months depending on your credit and experience.
Absolutely. Many investors refinance to DSCR when they become self-employed or need to buy more properties. The property's rental history makes qualifying straightforward.
DSCR loans handle short-term rental income more easily. Most conventional lenders won't count Airbnb income, but DSCR programs will if you provide booking history and projections.