Loading
in Burlingame, CA
Self-employed borrowers and real estate investors both need income documentation alternatives. But bank statement loans and DSCR loans solve different problems.
Bank statement loans verify your personal income through deposits. DSCR loans ignore your income entirely and qualify you on rental cash flow.
Most Burlingame buyers need one or the other — not both. Your tax strategy and property plans determine which path makes sense.
Bank statement loans work for self-employed borrowers who write off significant business expenses. Lenders review 12 or 24 months of deposits and apply a percentage as qualifying income.
You can use personal or business accounts. Most lenders apply 50% of deposits for personal accounts, 75% for business accounts as income.
These loans finance primary homes, second homes, and investment properties. Rates run 1-2% higher than conventional, with 10-20% down required depending on credit.
DSCR loans finance investment properties based solely on rental income. Your personal income, tax returns, and employment never enter the equation.
Lenders divide projected rent by the mortgage payment to calculate debt service coverage ratio. A DSCR of 1.0 means rent covers the payment exactly.
Most lenders require 1.0-1.25 DSCR and 20-25% down. Your credit score matters, but your W-2 income and debt-to-income ratio don't.
Bank statement loans require proof of personal income. DSCR loans require proof the property generates income. That's the fundamental split.
Bank statement loans work for any property type you occupy or rent. DSCR loans only finance investment properties — you can't live there.
Documentation differs completely. Bank statements show your deposits. DSCR uses an appraisal with rental market analysis or existing lease agreements.
As of February 2026, non-QM lenders have expanded alternative documentation options. Some now accept verified crypto holdings as reserves for both loan types.
Use bank statement loans when you're buying a home to live in and write off business expenses. Use DSCR when you're buying a rental and don't want lenders reviewing your personal finances.
Burlingame investors buying cash-flowing properties default to DSCR. Self-employed buyers moving into the home they're purchasing need bank statement loans.
Some borrowers qualify for both. Pick DSCR if the rental income is strong and you want to preserve your personal borrowing capacity for another purchase.
A broker with access to both programs can run scenarios. We compare qualification and rate differences across 200+ lenders to find your best fit.
Yes. Bank statement loans finance primary homes, second homes, and rentals. DSCR loans only work for investment properties.
Rates vary by borrower profile and market conditions. DSCR often prices slightly better when rental income is strong and you put 25% down.
Neither requires tax returns for income verification. DSCR ignores your income entirely. Bank statement loans use deposits instead of returns.
Both typically require 620 minimum. Stronger credit scores unlock better rates and lower down payment requirements on either program.
Yes. Lenders use a rental market analysis from the appraisal to project income. The property must show it can cover the payment.