Question 1

Can I use a DSCR loan for my primary residence in Buellton?

Accepted Answer

No, DSCR loans only finance investment properties that generate rental income. Primary residences require conventional, FHA, or other owner-occupied financing options.

Question 2

Which loan type offers better interest rates?

Accepted Answer

Conventional loans typically offer lower rates for qualified borrowers. DSCR rates run slightly higher but provide easier qualification. Rates vary by borrower profile and market conditions for both loan types.

Question 3

Do I need perfect credit for either loan in Santa Barbara County?

Accepted Answer

Neither requires perfect credit. Conventional loans typically start at 620 credit scores, while DSCR loans usually require 640 minimum. Higher scores improve your rates and terms.

Question 4

Can I avoid mortgage insurance with either loan type?

Accepted Answer

Yes, both loan types eliminate mortgage insurance with 20% or more down payment. Conventional loans under 20% down require PMI until you reach 20% equity.

Question 5

How many properties can I finance with each loan type?

Accepted Answer

Conventional loans typically limit investors to 10 financed properties. DSCR loans often allow unlimited properties since qualification doesn't depend on personal income or debt ratios.

Conventional vs DSCR Loans in Buellton: Choose the Right Financing for Your Property Goals