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in Stockton, CA
Both bank statement loans and DSCR loans skip W-2 income verification, but they serve different borrowers. Bank statement loans work for self-employed buyers using personal or business accounts to prove earnings.
DSCR loans ignore your personal income entirely and qualify you based solely on rental property cash flow. Stockton investors often run both options to see which delivers better terms for their situation.
Bank statement loans analyze 12 to 24 months of deposits to calculate income. Lenders typically use 50% to 100% of deposits depending on whether accounts are personal or business.
You can buy primary residences, second homes, or investment properties. Credit minimums usually start at 620, with 10% to 20% down depending on property type and deposit patterns.
These loans make sense for contractors, small business owners, or anyone with strong cash flow but complex tax returns. Most self-employed Stockton borrowers write off too much income to qualify conventionally.
DSCR loans divide monthly rental income by your mortgage payment (PITIA). A ratio above 1.0 means the property covers its own debt, though some lenders approve ratios as low as 0.75 with compensating factors.
These are investment property only. No personal income documentation required. Credit typically starts at 660 with 20% to 25% down, though lower ratios demand higher equity.
Stockton rental properties often cash flow well enough to hit 1.0+ DSCR with standard financing. This loan type works best when you want to scale a portfolio without personal income limiting your buying power.
Bank statement loans underwrite you as a borrower. DSCR loans underwrite the property as an asset. That distinction changes everything about which program works.
Bank statements require proof of self-employment income and let you buy any property type. DSCR ignores your income but restricts you to rentals only.
Rates vary by borrower profile and market conditions. DSCR typically prices slightly better when the property has strong cash flow, while bank statement loans often win for buyers with excellent credit and clean deposit history.
Use bank statement loans if you're buying a home to live in or your rental income alone won't carry the mortgage. They give you flexibility across property types but require proving your business generates sufficient deposits.
Choose DSCR if you're buying pure investment property and the rent covers the payment. Your personal income stays private, which matters if you want to stack multiple rental acquisitions without debt-to-income limits.
Many Stockton investors run both scenarios. Duplex owner-occupants often lean toward bank statements since DSCR won't work for primary residence. Pure landlords default to DSCR to keep scaling without income caps.
Yes. You could buy a primary home with bank statements and an investment property with DSCR simultaneously, assuming both meet their respective qualification standards.
Rates vary by borrower profile and market conditions. DSCR often prices better when the property has a DSCR above 1.25 and you put 25% down.
DSCR never requires personal tax returns. Bank statement loans occasionally ask for business returns if you use business accounts, but not always.
You'd refinance into a conventional loan once you have W-2 income or want better rates. DSCR itself doesn't convert, but refinancing is always an option.
Bank statement loans start at 10% down for primary homes. DSCR typically requires 20% to 25% down for investment properties.