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in Escalon, CA
Escalon investors and self-employed borrowers often can't qualify through traditional W-2 income docs. Bank statement and DSCR loans both bypass standard income verification, but they're built for different situations.
Bank statement loans prove income through your business deposits. DSCR loans ignore your income entirely and qualify you on rental cash flow alone.
Bank statement loans use 12 to 24 months of business or personal bank deposits to calculate qualifying income. Lenders typically average your monthly deposits and apply an expense factor to estimate net income.
This works for contractors, consultants, shop owners, and anyone whose tax returns show write-offs that lower their taxable income. You need 620+ credit and typically 10-20% down depending on the lender.
DSCR loans qualify you based solely on whether rental income covers the mortgage payment. Lenders look at the property's rent roll or market rent estimate and divide it by the proposed mortgage payment to get a ratio.
Most lenders want a DSCR of 1.0 or higher, meaning rent equals or exceeds the payment. Your personal income, tax returns, and W-2s don't matter at all. This works for investors scaling portfolios without income doc limits.
Bank statement loans care about your earning power. DSCR loans care about the property's earning power. If you're buying your primary residence or a second home, bank statements are your only option since DSCR requires an investment property.
Bank statement programs typically offer lower rates because lenders see your full financial picture. DSCR loans often price slightly higher but require zero personal income docs, making them faster to process and easier to scale across multiple properties.
Use bank statement loans when you're self-employed, buying a home you'll live in, or purchasing an investment property where you want to leverage your personal income strength. They're the go-to for Escalon business owners who write off significant expenses.
Use DSCR loans when you're buying rental property and want your personal income left out of the equation. Ideal for investors with multiple properties, complex tax situations, or anyone scaling a portfolio beyond what their W-2 or bank statements would support.
Yes, you can have a bank statement loan on your primary residence and DSCR loans on rental properties. They serve different purposes and don't interfere with each other.
Bank statement loans typically price 0.25-0.75% lower because lenders verify personal income. Rates vary by borrower profile and market conditions.
No. DSCR loans skip tax returns entirely and qualify based only on rental income covering the mortgage payment.
Yes, bank statement loans work for investment properties. But if the property's rental income is strong, DSCR often makes more sense.
DSCR loans typically close faster since underwriters don't analyze personal bank statements or tax returns. Processing time drops significantly when fewer docs are required.