Question 1

Can I use a DSCR loan to buy a vacation rental in Capitola?

Accepted Answer

Yes. DSCR lenders commonly finance short-term rentals. They may use projected or actual rental income to calculate the ratio.

Question 2

Do DSCR loans require a higher down payment?

Accepted Answer

Typically yes. Most DSCR lenders require 20-25% down. Conventional can go as low as 3% for qualified buyers.

Question 3

What credit score do I need for a DSCR loan?

Accepted Answer

Most DSCR lenders want a 680 minimum. Some go to 660, but rates worsen below 700.

Question 4

Can I buy a primary home with a DSCR loan?

Accepted Answer

No. DSCR loans are investment property only. Owner-occupied purchases require conventional or government-backed financing.

Question 5

Which loan closes faster in Capitola?

Accepted Answer

DSCR loans often close faster. No income verification means fewer documents and a shorter underwriting process.

Question 6

Can an LLC take title on a DSCR loan?

Accepted Answer

Yes. DSCR lenders commonly allow LLC vesting. Conventional loans require the borrower to hold title personally.

Conventional vs DSCR Loans in Capitola, CA