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in Mountain House, CA
Mountain House investors face a clear choice: conventional financing tied to personal income or DSCR loans underwritten purely on rental performance. Your employment status and investment goals determine which path makes sense.
Conventional loans offer lower rates but strict income verification. DSCR loans cost more upfront but ignore your W-2 and tax returns entirely.
Conventional loans require 620+ credit, full income documentation, and debt-to-income under 50%. Investment properties need 15-25% down, higher reserves, and prove you can afford the mortgage on paper.
Rates run 0.5-1% lower than DSCR programs. Lenders verify employment, pull tax returns, and count existing rental income only after a two-year history.
DSCR loans qualify on one metric: monthly rent divided by monthly mortgage payment. Get a 1.0 ratio or higher and you're approved, regardless of your job status or personal income.
You need 20-25% down, 680+ credit, and six months reserves. Lenders pull an appraisal with rent schedule, run the DSCR calculation, and approve based solely on property performance.
Conventional loans underwrite you as a borrower. DSCR loans underwrite the property as a business. That fundamental difference affects rates, down payments, and who actually gets approved.
W-2 earners with clean tax returns pay less on conventional. Self-employed investors writing off income choose DSCR. Mountain House rental rates support both approaches if you structure the deal correctly.
Choose conventional if you're W-2 employed with documented income and want the lowest rate. Choose DSCR if you're self-employed, show low taxable income, or already own multiple rentals that inflate your DTI.
Most Mountain House investors start conventional on their first rental, then switch to DSCR as their portfolio grows. You can't beat conventional rates when you qualify, but DSCR keeps you buying when your income docs no longer support more debt.
Yes, DSCR works for first-time investors. You just pay higher rates than conventional and need 20-25% down instead of 15%.
DSCR closes quicker because lenders skip employment verification and tax return analysis. Conventional takes longer to verify income.
Conventional allows cash-out on investment properties with stricter limits. DSCR lenders offer more flexible cash-out terms up to 75% LTV.
Conventional approves at 620 for investment properties. DSCR lenders want 680 minimum, sometimes 700 for best pricing.
Yes, you can refinance a conventional loan into DSCR anytime. Investors do this when adding rentals pushes DTI too high for more conventional loans.