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in Montague, CA
Both Bank Statement and DSCR loans skip traditional income verification, but they serve different borrowers. One qualifies you based on your business deposits, the other on rental cash flow.
In Montague's market, self-employed business owners typically choose Bank Statement loans while real estate investors lean toward DSCR. Your income source determines which path makes sense.
Bank Statement loans qualify you using 12 or 24 months of personal or business bank deposits. Lenders calculate income by averaging your monthly deposits and applying an expense ratio between 25% and 50%.
You need 620+ credit and 10-20% down depending on property type. These loans work for self-employed borrowers who show strong cash flow but write off most income for tax purposes.
Rates typically run 1-2% above conventional loans. The trade-off is quick approval without tax returns or profit-and-loss statements that might understate your actual earning power.
DSCR loans ignore your personal income completely. Qualification depends on one number: whether the property's rent covers the mortgage payment plus taxes and insurance.
Lenders want a DSCR of at least 1.0, meaning rent equals or exceeds the full housing payment. Most require 1.1 to 1.25 for better rates. You need 20-25% down and 660+ credit.
These loans close in your LLC or personal name without providing W-2s, pay stubs, or employment verification. Property cash flow is the only income document that matters.
Bank Statement loans use your business cash flow as income. DSCR loans use the property's rental income. That's the fundamental split—one qualifies you, the other qualifies the investment.
Down payments differ too. Bank Statement loans often accept 10-15% down on primary residences. DSCR loans require 20-25% because they're investment properties only.
Credit requirements favor Bank Statement borrowers. You can qualify at 620 credit with strong deposits. DSCR lenders want 660 minimum, and some require 680+ for competitive rates.
Choose Bank Statement loans if you're self-employed and buying a home to live in. Also pick them if your business deposits are strong but your rental property doesn't generate enough rent to meet DSCR requirements.
Choose DSCR if you're buying rental property in Montague and want to keep your personal finances separate. These work best when you have multiple properties or want to scale a portfolio without personal income affecting your borrowing capacity.
Some investors use both. They finance rentals with DSCR loans and their primary residence with a Bank Statement loan. The right choice depends on whether you're housing yourself or building an investment portfolio.
Yes, but most lenders require 20-25% down for investment properties. If the property has strong rental income, a DSCR loan might offer better terms.
Rates are similar, typically 1-2% above conventional. DSCR loans sometimes edge lower if your debt service coverage ratio exceeds 1.25.
DSCR loans commonly close in LLC names for liability protection. Bank Statement loans usually require personal borrowing but some lenders offer LLC options.
Yes. Investors sometimes start with Bank Statement loans then refinance to DSCR once rental income stabilizes and meets coverage requirements.
Bank Statement loans close in 3-4 weeks with deposit documentation. DSCR loans often close faster since they only review lease agreements and property appraisals.