Question 1

Can I use DSCR for my primary residence in Morgan Hill?

Accepted Answer

No. DSCR loans only work for investment properties with rental income. You must use conventional or FHA for owner-occupied homes.

Question 2

What rent-to-payment ratio do DSCR lenders require?

Accepted Answer

Most lenders want 1.0 or higher, meaning rent equals or exceeds the mortgage payment. Some accept 0.85-0.9 with larger down payments or higher credit scores.

Question 3

Do conventional loans allow rental income for qualification?

Accepted Answer

Yes, but you'll need lease agreements and tax return history showing rental deposits. DSCR skips the personal income check entirely and looks only at the property.

Question 4

Which loan type closes faster in Morgan Hill?

Accepted Answer

DSCR typically closes in 21-30 days versus 30-45 for conventional. Less documentation means fewer delays, especially for self-employed borrowers.

Question 5

Can I refinance from conventional to DSCR later?

Accepted Answer

Yes. Many investors refinance to DSCR after building equity to simplify their portfolio financing and eliminate income verification on future purchases.

Conventional vs DSCR Loans in Morgan Hill: Which Fits Your Investment Strategy?