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in Stockton, CA
Stockton investors face a clear choice: conventional loans for owner-occupants and small portfolios, or DSCR loans for rental-focused strategies. The right pick depends on whether you're qualifying with W-2 income or rental cash flow.
Conventional loans scrutinize your tax returns and debt ratios. DSCR loans ignore your personal income entirely—they only care if the property's rent covers the mortgage.
Conventional loans require stable W-2 or self-employment income with two years of tax returns. You'll need a 620 credit score minimum, though 680+ gets better rates.
Owner-occupants put down 3-5%. Investment properties need 15-25% down depending on portfolio size. Rates vary by borrower profile and market conditions.
These loans cap at ten financed properties per borrower. Debt-to-income ratios typically max out at 45-50%, including your new Stockton mortgage payment.
DSCR loans qualify based on rental income divided by the mortgage payment. Lenders want a ratio of 1.0 or higher—meaning rent equals or exceeds the PITI payment.
You don't submit tax returns or prove employment. Credit scores start at 660 for most programs. Down payments run 20-25% on single-family rentals.
No property count limits exist with DSCR financing. If you already have ten conventional loans, DSCR lets you keep buying. Closing takes 21-30 days with fewer income documents.
Conventional loans cost less upfront and monthly for owner-occupants. DSCR rates run 0.50-1.25% higher because they're non-QM products with looser income verification.
Income documentation splits these programs. Conventional requires full tax and employment verification. DSCR skips that entirely—lenders pull a rent schedule or appraisal instead.
Property limits matter for active investors. Conventional caps at ten financed properties. DSCR has no ceiling, making it the only option once you hit that wall.
Choose conventional if you're buying a Stockton primary residence or your first few rentals. The lower rates and smaller down payments beat DSCR when you qualify on W-2 income.
Pick DSCR if you're self-employed with complex tax write-offs, own ten-plus financed properties, or want faster closings. Stockton's rental market supports the 1.0+ DSCR ratios most lenders require.
Many investors use both. Conventional loans finance owner-occupied duplexes or early rentals. DSCR loans take over once conventional limits kick in or when rental income exceeds personal income.
No. DSCR loans only finance investment properties that generate rental income. You must occupy the home less than 14 days per year.
DSCR loans close in 21-30 days with fewer docs. Conventional takes 30-45 days due to full income and employment verification.
Yes. Conventional allows cash-out up to 75% LTV on rentals. DSCR programs go to 80% LTV with strong rent coverage.
Conventional starts at 620 but needs 740+ for best rates. DSCR requires 660 minimum with pricing breaks at 700 and 740.
Yes through refinancing. Once you have two years of rental income history, conventional programs may offer better rates for that property.