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in San Jose, CA
San Jose is one of the most expensive markets in the country. How you finance here matters as much as what you buy.
Conventional loans work for primary buyers with strong W-2 income. DSCR loans are built for investors whose rental income does the qualifying.
Conventional loans follow Fannie Mae and Freddie Mac guidelines. They offer competitive rates and flexible terms for qualified borrowers.
You need solid credit, verifiable income, and a down payment. In Santa Clara County, conforming loan limits allow serious purchasing power.
DSCR loans skip your personal income entirely. Lenders look at the property's gross rent versus its monthly debt payment.
A DSCR of 1.0 means rent covers the mortgage. Most lenders want 1.1 or higher. Your tax returns stay out of it.
Conventional rates run lower. DSCR loans price in the added risk of no income verification — expect a rate premium.
HousingWire flagged the 30-year fixed hitting 6.57% with applications dropping sharply. That rate pressure hits DSCR borrowers harder since their margins are tighter. Rates vary by borrower profile and market conditions.
Conventional loans let you buy a primary residence. DSCR locks you into investment property — no exceptions.
Buying a home to live in? Conventional is almost always the right call. Better rates, lower down payment options, more lender competition.
Buying a rental in San Jose's tight market? DSCR makes sense if your personal income is complex or self-employed. The property cash flow does the heavy lifting.
No. DSCR loans are for investment properties only. You need a conventional or government-backed loan for a primary residence.
Most DSCR lenders want a 680 minimum. Some go lower, but the rate premium increases significantly below that threshold.
No. DTI is irrelevant for DSCR loans. Lenders only care whether the property's rent covers its mortgage payment.
Conventional rates are consistently lower. DSCR lenders charge more because they skip income verification. Rates vary by borrower profile and market conditions.
Some lenders accept a market rent appraisal for new rentals. Many prefer a signed lease showing actual rental income.
Both typically require 20-25% down on investment properties. DSCR lenders sometimes require 25% depending on the loan size.