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in Gilroy, CA
Gilroy borrowers who don't fit traditional loan requirements have strong alternatives. Bank Statement Loans and DSCR Loans both offer paths to financing without W-2s or tax returns.
These non-QM options serve different purposes in Santa Clara County's market. Bank Statement Loans help self-employed borrowers buy primary residences or investment properties. DSCR Loans focus solely on rental property investors who want to qualify based on property income.
Bank Statement Loans use 12 to 24 months of personal or business bank statements to verify income. Lenders analyze deposits to calculate qualifying income for self-employed borrowers who write off significant business expenses.
This option works for primary homes, second homes, and investment properties in Gilroy. Self-employed professionals, contractors, and business owners commonly use this program when their tax returns don't reflect actual cash flow.
Credit scores typically need to be 620 or higher. Down payments start at 10% for primary residences and 15-20% for investment properties. Rates vary by borrower profile and market conditions based on your specific financial picture.
DSCR Loans qualify borrowers based solely on the rental property's income potential. The Debt Service Coverage Ratio compares monthly rent to the monthly mortgage payment, with no personal income verification needed.
These loans serve real estate investors in Gilroy who want to expand their portfolios without employment documentation. The property must generate enough rental income to cover the mortgage payment, typically requiring a DSCR of 1.0 or higher.
Investment properties only—DSCR Loans cannot be used for primary residences. Minimum down payments typically start at 20-25%. Credit score requirements usually begin at 620, though stronger credit yields better terms.
The fundamental difference lies in what qualifies you. Bank Statement Loans analyze your business or personal cash flow through bank deposits. DSCR Loans look exclusively at the rental property's income potential without considering your personal finances.
Property use separates these programs clearly. Bank Statement Loans finance owner-occupied homes and investment properties. DSCR Loans fund investment properties only and never primary residences in Santa Clara County.
Documentation requirements differ significantly. Bank Statement borrowers provide 12-24 months of statements showing deposit history. DSCR borrowers provide a lease agreement or rental analysis proving the property generates sufficient income to cover payments.
Choose Bank Statement Loans if you're self-employed and buying a primary residence in Gilroy. This option also works well for investors whose personal income strengthens their application even when buying rentals.
DSCR Loans make sense for investors building portfolios without personal income documentation. If you own multiple properties, have complex tax situations, or want to separate personal finances from investment decisions, DSCR streamlines the process.
Many Gilroy investors with strong personal income still prefer DSCR for its simplicity. Others need Bank Statement Loans because they're buying homes to live in. Your specific situation determines which program serves you best.
Yes, Bank Statement Loans work for both primary residences and investment properties. The program verifies your income through bank deposits, allowing you to qualify based on cash flow regardless of property type.
No, DSCR Loans qualify you based solely on the rental property's income. You don't provide personal tax returns, W-2s, or employment verification—only proof the property generates sufficient rental income.
Rates vary by borrower profile and market conditions for both programs. Your credit score, down payment size, and overall financial strength affect pricing more than the specific loan type chosen.
You can use different loan types for different properties. Many Gilroy investors use Bank Statement Loans for primary residences while financing rental properties through DSCR Loans based on each property's specific situation.
Bank Statement Loans typically require 10-20% down depending on property type. DSCR Loans generally need 20-25% down since they're investment-only. Both programs may offer lower rates with larger down payments.