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in Redwood City, CA
Redwood City borrowers who don't fit traditional mortgage requirements have two powerful non-QM options. Bank Statement Loans verify income through business cash flow, while DSCR Loans focus entirely on rental property performance.
Both programs skip W-2s and tax returns, making them ideal for self-employed professionals and real estate investors in San Mateo County. Your choice depends on whether you're buying a primary residence or investment property.
Bank Statement Loans analyze 12 to 24 months of personal or business bank deposits to calculate qualifying income. This works well for Redwood City entrepreneurs, freelancers, and business owners whose tax returns don't reflect true earning power.
You can use these loans for primary residences, second homes, or investment properties. Lenders typically calculate income by averaging deposits and applying an expense ratio based on your business structure.
Rates vary by borrower profile and market conditions. Credit scores above 680 and down payments of 10-20% strengthen your application significantly.
DSCR Loans qualify you based solely on rental income from the property you're purchasing. Lenders divide monthly rent by the mortgage payment to calculate the debt service coverage ratio.
These loans work exclusively for investment properties in Redwood City and throughout San Mateo County. Your personal income, employment, and tax returns don't factor into approval.
A DSCR of 1.0 or higher means the rent covers the mortgage payment. Many lenders require 1.25 or higher, though some accept lower ratios with compensating factors like larger down payments.
The fundamental difference is what gets analyzed. Bank Statement Loans examine your business cash flow, while DSCR Loans focus purely on rental property performance.
Bank Statement Loans offer flexibility for multiple property types, including the home where you'll live. DSCR Loans only work for investment properties but require no personal income documentation whatsoever.
Down payment requirements differ too. Bank Statement Loans may accept 10-15% down for primary residences, while DSCR Loans typically require 20-25% for investment properties in competitive markets like Redwood City.
Choose Bank Statement Loans if you're self-employed and buying a primary residence or vacation home in Redwood City. This option makes sense when your bank deposits prove steady income but tax write-offs reduce your qualified earnings.
Pick DSCR Loans when building an investment portfolio without touching your personal finances. Real estate investors who want to scale quickly appreciate that these loans don't tie up personal debt-to-income ratio capacity.
Many San Mateo County investors use both loan types strategically. Bank Statement Loans fund personal residences while DSCR Loans handle rental acquisitions, creating a complete financing strategy for building wealth through real estate.
Yes, Bank Statement Loans work for investment properties, primary residences, and second homes. You'll still need to document income through bank statements rather than tax returns.
No, DSCR Loans qualify entirely on rental property income. Your employment, tax returns, and personal earnings don't factor into the approval decision.
Rates vary by borrower profile and market conditions. Both are non-QM products with similar pricing, though specific terms depend on credit score, down payment, and property type.
Absolutely. Many investors use Bank Statement Loans for personal residences and DSCR Loans for rental properties, maximizing financing capacity across their portfolio.
Both typically require minimum credit scores of 620-680, though higher scores unlock better terms. Stronger credit compensates for other risk factors in your application.