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in Los Gatos, CA
Los Gatos attracts two very different buyers. Owner-occupants want conventional loans. Investors buying rentals need something else entirely.
DSCR loans qualify you on rental income, not your W-2. That split is the core of this comparison.
Conventional loans are standard mortgages. No government backing — just you, your credit, and your income docs.
Lenders want at least a 620 credit score. Strong W-2 income and low debt ratios get you the best rates. Rates vary by borrower profile and market conditions.
DSCR loans skip the personal income check. Lenders look at whether the rental income covers the mortgage payment.
A DSCR above 1.0 means the property pays for itself. Most lenders want 1.0 to 1.25. Your tax returns stay in the drawer.
Conventional loans require full income docs. DSCR loans require a rent schedule and appraisal. That's a fundamental difference in how you qualify.
HousingWire flagged the 30-year fixed hitting 6.57% — that rate pressure hits conventional investors harder. DSCR borrowers can offset rate increases if rents hold strong in Los Gatos.
Buying your own home in Los Gatos? Conventional is almost always the right call. Better rates, lower down payments, more lender options.
Buying a rental property and already maxed on debt-to-income? DSCR solves that. Self-employed investors with messy tax returns especially benefit.
No. DSCR loans are for investment properties only. You need a conventional or government loan for a primary residence.
Most DSCR lenders want at least 660-680. Conventional loans can go as low as 620 with the right lender.
Yes. DSCR rates run higher because lenders take on more risk. Rates vary by borrower profile and market conditions.
Divide the monthly rental income by the full mortgage payment. A result of 1.0 or higher typically satisfies lenders.
Yes, but lenders require two years of tax returns. If write-offs crush your taxable income, DSCR may be a better fit for rentals.
DSCR loans often close faster since there's no income verification process. Conventional timelines depend on documentation complexity.