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in Solana Beach, CA
Solana Beach investors and self-employed professionals often need flexible financing beyond traditional mortgages. Both Bank Statement and DSCR loans offer non-QM solutions, but they serve different purposes and borrower profiles.
Bank Statement loans verify income through deposits rather than tax returns, ideal for business owners with write-offs. DSCR loans qualify buyers based solely on rental property cash flow, removing personal income from the equation entirely.
Choosing between these options depends on whether you're buying your residence or an investment property. Each loan type has distinct qualifying criteria, down payment requirements, and rate structures.
Bank Statement loans analyze 12 to 24 months of business or personal bank deposits to calculate qualifying income. Lenders typically use 50-75% of average monthly deposits as income, depending on your business type and expense ratio.
These loans work well for self-employed Solana Beach residents buying primary residences, second homes, or investment properties. You avoid the tax return requirement that often disqualifies entrepreneurs who maximize business deductions.
Expect down payments starting at 10-20% depending on property type and credit profile. Rates vary by borrower profile and market conditions but typically run higher than conventional loans due to the alternative documentation approach.
DSCR loans qualify investors based on a property's rental income compared to its monthly debt obligations. Lenders calculate the Debt Service Coverage Ratio by dividing projected rental income by the total monthly payment including taxes and insurance.
These loans are strictly for investment properties in Solana Beach and throughout San Diego County. Your personal income, employment, and tax returns don't factor into approval, making them perfect for portfolio builders and high-net-worth investors with complex finances.
Most DSCR programs require 15-25% down and look for ratios above 1.0, meaning rent covers the mortgage payment. Properties with strong rental potential in desirable beach communities often qualify easily given Solana Beach's rental demand.
The fundamental difference is what gets analyzed: Bank Statement loans evaluate your personal or business income, while DSCR loans examine the investment property's rental income. This makes Bank Statement loans suitable for any property type, but restricts DSCR loans to rentals only.
Bank Statement loans require documented deposit history and consistent banking activity. DSCR loans need rental income documentation like lease agreements or market rent appraisals, but your personal bank accounts stay private.
For self-employed Solana Beach residents buying a home to live in, Bank Statement is your only option between these two. Investors with strong rental properties but complicated personal finances typically prefer DSCR loans for their simplicity.
Choose Bank Statement loans if you're self-employed and buying a primary residence, second home, or investment property in Solana Beach. This option works when you have strong bank deposits but tax returns don't reflect your true earning power due to business write-offs.
Select DSCR loans when purchasing rental properties with solid income potential. This path makes sense for investors building portfolios, those with multiple income sources that complicate traditional qualifying, or anyone wanting to keep personal finances separate from investment purchases.
Many Solana Beach investors use both loan types strategically: Bank Statement for personal residences and DSCR for rental properties. Working with an experienced non-QM lender helps you match the right product to each property and situation.
Yes, Bank Statement loans work for investment properties. However, if the rental income is strong enough, a DSCR loan might be simpler since it doesn't require reviewing your personal bank statements or business finances.
Rates vary by borrower profile and market conditions for both programs. DSCR loans sometimes offer slightly better pricing when the property has a strong rental ratio, but individual circumstances matter more than loan type alone.
Most Bank Statement and DSCR programs accept credit scores from 620-680 and up. Higher scores unlock better rates and terms, but both loan types accommodate borrowers who wouldn't qualify conventionally.
Both typically close in 30-45 days. Bank Statement loans may take slightly longer if you need to gather extensive deposit documentation. DSCR loans often move faster since there's less financial documentation overall.
Yes, borrowers often refinance between these products as circumstances change. You might start with Bank Statement then refinance to DSCR once you establish rental history, or vice versa if converting a rental to personal use.