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in Mount Shasta, CA
Both bank statement and DSCR loans skip traditional W-2 income verification. But they serve completely different borrowers in Mount Shasta's mountain real estate market.
Bank statement loans work for self-employed buyers purchasing primary homes or second properties. DSCR loans work for investors acquiring rental properties based solely on what the property earns.
Most Mount Shasta borrowers confuse these two loan types because both fall under the non-QM umbrella. Understanding which one matches your situation saves months of wasted effort.
Bank statement loans use 12 or 24 months of personal or business bank deposits to calculate your income. Underwriters apply a percentage to your total deposits after removing non-income transfers.
You need 10-20% down, 620+ credit, and consistent monthly deposits showing business revenue. This works well for Mount Shasta business owners buying homes, vacation properties, or investment properties they'll manage personally.
The loan qualifies you as a borrower based on your earning capacity. You can buy any property type: primary residence, second home, or rental. The property's rental income doesn't matter for qualification.
DSCR loans ignore your personal income completely. Underwriters only look at whether the rental property generates enough rent to cover its own mortgage payment plus taxes and insurance.
You need 20-25% down, 640+ credit, and a property generating market-rate rent. The debt service coverage ratio must typically exceed 1.0, meaning rent covers or exceeds all housing costs.
This works for Mount Shasta investors buying cabins, long-term rentals, or short-term vacation properties. Your tax returns, bank statements, and employment don't factor into approval.
Bank statement loans qualify you. DSCR loans qualify the property. That's the fundamental split between these two non-QM products.
Bank statement loans let you use one property's equity to buy another because they evaluate your total earning power. DSCR loans treat each property as a standalone deal based purely on its rental performance.
Rates run similar on both, typically 1-2% above conventional rates. But DSCR loans often require larger down payments because lenders see pure investment deals as higher risk than owner-occupied purchases.
Bank statement loans work in Mount Shasta for buyers purchasing primary residences or managing their own rentals. DSCR loans work for absentee investors or borrowers whose personal income already supports too much debt.
Choose bank statement loans if you're self-employed, buying a home to live in, or acquiring a rental you'll actively manage. You need consistent deposits and reasonable credit, but your tax returns show minimal taxable income.
Choose DSCR loans if you're a W-2 employee buying rental properties, already own multiple properties, or simply don't want to document personal income. The property must generate enough rent to cover its costs.
Mount Shasta's vacation rental market makes DSCR loans especially useful for short-term rental investors. But if you're a local business owner buying your primary residence, bank statement loans make more sense.
Yes, bank statement loans work for investment properties. But DSCR loans often make more sense for pure rentals since they don't require personal income documentation.
Rates run similar, typically 1-2% above conventional loans. Your credit score and down payment affect pricing more than the loan type itself.
Yes, many DSCR lenders accept short-term rental income if you provide documented booking history or a market rent analysis. Rates vary by borrower profile and market conditions.
Bank statement loans don't require tax returns for income calculation. DSCR loans may request them to verify other debts, but they don't use them for qualification.
Bank statement loans typically start at 620 credit. DSCR loans usually require 640 minimum, sometimes higher depending on the lender and property type.