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in Pacifica, CA
Self-employed professionals and real estate investors in Pacifica often struggle with traditional mortgage requirements. Bank Statement Loans and DSCR Loans offer alternative paths to financing, but they serve different purposes and borrower profiles.
Bank Statement Loans verify income through deposits rather than tax returns, while DSCR Loans qualify you based on rental property cash flow. Understanding which option aligns with your situation makes the difference between approval and rejection.
Bank Statement Loans use 12 to 24 months of personal or business bank statements to calculate qualifying income. Lenders analyze your deposits to determine monthly income, making them ideal for self-employed borrowers with strong cash flow but complex tax returns.
You can finance owner-occupied homes, second homes, or investment properties with this program. The loan works well for business owners, freelancers, and independent contractors who write off significant expenses on their tax returns.
Rates vary by borrower profile and market conditions. Expect higher rates than conventional loans but competitive terms among non-QM options, especially with strong credit and down payment.
DSCR Loans qualify you based on rental income from the investment property itself, not your personal income. The Debt Service Coverage Ratio compares monthly rental income to the monthly mortgage payment, including principal, interest, taxes, and insurance.
These loans are strictly for investment properties, not primary residences. You never need to provide tax returns, W-2s, or pay stubs. The property's ability to generate rent determines approval.
DSCR Loans excel for investors buying multiple properties, those with substantial rental portfolios, or buyers whose personal income doesn't reflect their investment capacity. Rates vary by borrower profile and market conditions, typically competitive with other non-QM programs.
The fundamental difference lies in what qualifies you. Bank Statement Loans require your personal or business income documentation, while DSCR Loans ignore your income entirely and focus on the property's rental potential.
Bank Statement Loans allow owner-occupied purchases, making them suitable if you're buying a Pacifica home to live in. DSCR Loans work only for investment properties, whether you're buying a rental near the beach or an income property inland.
Credit and down payment requirements differ too. Bank Statement Loans typically need credit scores around 620-640 with 10-20% down. DSCR Loans often require 15-25% down with similar credit standards, though requirements vary by lender and property type.
Choose Bank Statement Loans if you're self-employed and buying a primary residence, second home, or investment property in Pacifica. This option works when you have strong bank deposits but your tax returns show limited income due to business deductions.
Choose DSCR Loans if you're buying strictly for investment purposes and the property generates solid rental income. This program shines when you're scaling a rental portfolio, your personal debt-to-income ratio is maxed out, or you want to keep personal finances separate from investment activities.
Some Pacifica investors qualify for both programs. Your choice depends on the property type, your income situation, and your long-term strategy. Consider consulting with a mortgage professional who understands both products and San Mateo County's rental market dynamics.
No, DSCR Loans are strictly for investment properties. If you plan to occupy the home, you'll need a Bank Statement Loan or another program that allows owner-occupancy.
Rates vary by borrower profile and market conditions for both programs. Your credit score, down payment, and property characteristics impact pricing more than the loan type itself.
DSCR Loans never require personal tax returns. Bank Statement Loans may request business returns but primarily qualify you using bank deposits rather than reported income.
Bank Statement Loans typically require 10-20% down depending on occupancy. DSCR Loans generally need 15-25% down for investment properties, with exact requirements varying by lender.
Yes, both programs allow refinancing. Bank Statement Loans work for rate-and-term or cash-out refinances on any eligible property type, while DSCR Loans refinance investment properties only.