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in Tracy, CA
Tracy investors and self-employed borrowers often hit the same wall with conventional loans: income verification. Bank Statement and DSCR loans solve different problems for different buyers.
Bank Statement loans work for self-employed borrowers buying primary or investment property. DSCR loans are built exclusively for investors who want their rental income to do the talking.
Bank Statement loans qualify you using 12 to 24 months of business or personal bank deposits. Lenders calculate your income by averaging deposits and applying expense ratios that vary by industry.
You can use these loans for primary homes, second homes, or investment properties in Tracy. Credit scores typically need to hit 620 minimum, though some lenders want 640 or higher.
DSCR loans ignore your personal income completely. Lenders divide the property's monthly rent by its monthly debt payment to get the debt service coverage ratio.
Most lenders want a ratio of 1.0 or higher, meaning rent covers the mortgage payment. Some accept ratios as low as 0.75 if you put more money down or have strong reserves.
Bank Statement loans care about your personal income from self-employment. DSCR loans care about the property's rental income. That fundamental split determines which loan fits your situation.
Bank Statement requires tax returns in some cases and focuses on your earning history. DSCR requires a lease agreement or rental appraisal and focuses on the property's cash flow potential.
Use Bank Statement if you're self-employed buying a Tracy home to live in or you want flexibility across property types. Use DSCR if you're buying Tracy rental property and don't want to prove personal income.
DSCR makes sense for W-2 earners building a rental portfolio or investors with complex tax returns. Bank Statement works better for business owners buying primary residences who write off significant expenses.
Yes, Bank Statement loans work for investment properties. But DSCR typically offers better rates and easier qualification if the property's rent supports the payment.
Rates vary by borrower profile and market conditions. DSCR often prices slightly better for strong rental properties with 1.25+ ratios.
DSCR never requires personal tax returns. Some Bank Statement lenders want one or two years of business returns depending on their program.
You can use different loan types for different properties. Many investors use DSCR for rentals and Bank Statement for personal residences.
DSCR typically closes faster since it requires less personal financial documentation. Bank Statement can take longer if underwriting requests additional deposit explanations.