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in San Bruno, CA
Both loans skip W-2 income verification, but they serve different borrowers. Bank statement loans work for self-employed buyers purchasing a primary residence or second home. DSCR loans are built for investors buying rental property.
San Bruno sits between San Francisco and the Peninsula tech corridor. That creates demand for both owner-occupied housing and investment rentals. Your financing choice depends on whether you're moving in or renting out.
Bank statement loans pull your income from 12 to 24 months of business or personal bank deposits. Lenders average your monthly deposits and apply an expense factor — usually 25% to 50% depending on whether you use business or personal accounts.
You need 10% to 20% down, a 620 minimum credit score, and statements showing consistent deposits. This works for contractors, consultants, small business owners, and anyone whose tax returns show less income than they actually bring in.
DSCR loans ignore your personal income completely. Lenders divide the property's rental income by its mortgage payment to calculate the debt service coverage ratio. A ratio above 1.0 means the rent covers the payment.
You need 20% to 25% down and a 640 minimum credit score. Many lenders approve DSCR deals with ratios as low as 0.75 if you put more money down. Your job, business tax returns, and personal income never enter the conversation.
The biggest split is property use. Bank statement loans let you buy a home you'll live in. DSCR loans require an investment property with rental income. If you're moving to San Bruno for work, DSCR won't help.
Income verification works differently. Bank statement loans review your deposits to prove you earn enough. DSCR loans look only at the property's rental income. That means DSCR works even if you have inconsistent business revenue or significant write-offs.
Down payment and credit requirements tilt toward bank statement loans. You can get approved with 10% down and a 620 score. DSCR typically needs 20% to 25% down and a 640 score, though some lenders push both higher for lower ratios.
Pick bank statement loans if you're self-employed and buying a home to live in. They're the only non-QM option for primary residence purchases when you can't use tax returns. You'll need steady deposits and enough down payment to offset higher rates.
Pick DSCR loans if you're buying rental property and don't want to document personal income. This works for investors with strong rental markets but inconsistent business income. San Bruno's proximity to SF and Peninsula jobs supports stable rental demand.
HousingWire just covered Rate's new RateFi product letting borrowers use crypto holdings to qualify for non-QM loans. That expands bank statement loan options for self-employed borrowers with significant digital assets, though DSCR still doesn't require any personal income verification.
Yes. Bank statement loans work for investment property, but DSCR is usually cheaper and easier because you don't document personal income.
Lenders use a market rent appraisal or signed lease to verify income. You don't need a tenant in place before closing.
DSCR typically prices slightly lower than bank statement loans. Both run 1% to 2% above conventional rates depending on credit and down payment.
DSCR skips personal income entirely. Bank statement loans require 12 to 24 months of deposit history but no tax returns.
Bank statement loans start at 620. DSCR loans typically need 640 minimum, though some lenders go higher for low ratios.