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in Half Moon Bay, CA
Half Moon Bay borrowers who don't fit traditional lending criteria have two powerful non-QM options. Bank Statement Loans and DSCR Loans each serve distinct purposes for different types of borrowers in San Mateo County.
Self-employed professionals typically choose Bank Statement Loans, while real estate investors gravitate toward DSCR Loans. Understanding the fundamental differences helps you select the right financing path for your coastal property purchase.
Bank Statement Loans verify income through 12 to 24 months of personal or business bank deposits. This approach works perfectly for Half Moon Bay's self-employed residents—consultants, business owners, freelancers—who show strong cash flow but significant tax write-offs.
You'll need consistent deposits that demonstrate adequate income to support your mortgage payment. Lenders analyze average monthly deposits and may apply a percentage reduction for business expenses, typically 25% to 50% depending on your situation.
These loans can finance primary residences, second homes, or investment properties throughout San Mateo County. Rates vary by borrower profile and market conditions, with down payments typically starting at 10% to 20%.
DSCR Loans qualify you based solely on your rental property's income potential, not your personal income. The property itself must generate enough rent to cover the mortgage payment, property taxes, insurance, and HOA fees.
Lenders calculate a Debt Service Coverage Ratio by dividing the property's monthly rental income by its monthly debt obligations. A DSCR of 1.0 means the rent exactly covers expenses, while 1.25 means rent exceeds expenses by 25%.
These loans exclusively finance investment properties in Half Moon Bay and throughout California. You won't provide tax returns or W-2s—your personal income doesn't factor into approval. Rates vary by borrower profile and market conditions.
The qualification method separates these two loan types. Bank Statement Loans evaluate your personal income through deposits, while DSCR Loans ignore your income entirely and focus on rental property cash flow.
Bank Statement Loans work for any property type—primary residence, vacation home, or rental. DSCR Loans only finance investment properties you'll rent out. This distinction matters significantly when choosing your Half Moon Bay financing strategy.
Documentation requirements differ substantially. Bank Statement borrowers provide 12-24 months of bank statements showing deposit patterns. DSCR borrowers provide a lease agreement or rental market analysis proving the property generates sufficient income.
Choose Bank Statement Loans when buying a Half Moon Bay home you'll occupy as your primary residence or second home. Self-employed borrowers with strong bank deposits but limited qualifying income on tax returns benefit most from this approach.
Choose DSCR Loans when purchasing investment properties throughout San Mateo County. Real estate investors who want to avoid personal income scrutiny or have multiple rental properties find DSCR financing ideal for portfolio growth.
Some situations allow either option. If you're self-employed and buying an investment property, you could potentially qualify under both programs. The better choice depends on whether your bank statements or the property's rental income provides stronger qualification.
Yes, Bank Statement Loans work for investment properties, second homes, and primary residences. You'll qualify based on your personal income shown through bank deposits rather than the rental income.
No, DSCR Loans don't require tax returns or income verification. Qualification depends entirely on the rental property's income compared to its debt obligations.
Rates vary by borrower profile and market conditions for both loan types. Your credit score, down payment, and property type influence your specific rate more than the loan program itself.
Both typically require 15% to 25% down for investment properties. Bank Statement Loans may allow 10% down for primary residences, while DSCR Loans don't finance owner-occupied homes.
Yes, self-employed investors might qualify under both programs. Your broker can compare which option offers better terms based on your bank statements versus the property's rental income.