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in Burlingame, CA
Burlingame borrowers who don't fit traditional mortgage boxes have strong alternatives. Bank Statement and DSCR loans both serve non-traditional income situations, but they work in fundamentally different ways.
Bank Statement loans help self-employed professionals verify income through deposits rather than tax returns. DSCR loans focus exclusively on investment property cash flow. Understanding which matches your situation makes all the difference.
Bank Statement loans analyze 12 to 24 months of business or personal bank deposits to calculate qualifying income. This works well for business owners, freelancers, and contractors whose tax returns don't reflect true earning power.
Self-employed professionals in Burlingame often write off legitimate business expenses that reduce taxable income. Bank Statement loans look at gross deposits instead, potentially revealing much higher qualifying income than tax returns show.
These loans require the property to be owner-occupied or a second home. You'll need decent personal credit and the ability to document consistent deposit patterns in your accounts.
DSCR loans qualify you based solely on rental income versus the mortgage payment. Your personal income, employment, and tax returns don't matter. The property itself must demonstrate adequate cash flow.
Lenders calculate the Debt Service Coverage Ratio by dividing monthly rent by the total housing payment. A ratio above 1.0 means rent covers the mortgage. Most lenders want to see ratios between 1.0 and 1.25 for approval.
These loans work exclusively for investment properties in Burlingame. You can't live in the property. DSCR loans shine when you have strong rental income but complex personal finances or multiple properties.
The fundamental split: Bank Statement loans require you to live in the property and prove personal income through deposits. DSCR loans require rental property status and prove qualification through lease agreements or market rent analysis.
Bank Statement loans examine your financial patterns and credit history closely. DSCR loans care more about the property's numbers than yours. If you have challenging personal credit or high debt-to-income ratios, DSCR often provides easier qualification.
Rate structures differ too. Rates vary by borrower profile and market conditions, but DSCR loans typically price based on rental coverage strength. Bank Statement loans price more on credit score and down payment size.
Choose Bank Statement loans when buying a Burlingame home you'll live in and you're self-employed with strong bank deposits. This works for primary residences and vacation homes where you can document consistent income flow.
Choose DSCR loans when acquiring rental properties in Burlingame or San Mateo County. This path makes sense for investors building portfolios, those with multiple rental properties, or buyers who want to keep personal finances separate from investment qualification.
Some borrowers eventually use both products. You might buy a primary residence with a Bank Statement loan, then later acquire rentals using DSCR financing. Each serves its specific purpose in different real estate strategies.
No. Bank Statement loans require owner occupancy or second home status. For rental properties, DSCR loans are the appropriate choice since they qualify based on rental income.
DSCR loans often qualify borrowers with challenging personal finances since they focus on property income. Bank Statement loans require stronger personal credit and verifiable deposit patterns.
Yes, both are non-QM products requiring 15-25% down typically. Exact requirements vary by borrower profile and market conditions, but expect higher down payments than traditional financing.
Bank Statement loans work well with multiple income streams that deposit into your accounts. DSCR loans only consider the specific property's rental income for qualification.
Rates vary by borrower profile and market conditions. Both are non-QM products with higher rates than conventional loans, but competitive with each other depending on your specific situation.