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in Mount Shasta, CA
Mount Shasta draws second-home buyers and investors looking for rental income from vacation properties. The loan you pick depends on whether you're buying a primary residence or an investment property.
Conventional loans work well for owner-occupants and some investors with W-2 income. DSCR loans ignore your tax returns entirely and qualify you based solely on what the property will rent for.
Most borrowers in Mount Shasta use conventional financing for their first purchase. Real estate investors with multiple properties or complex tax situations switch to DSCR to avoid income verification headaches.
Conventional loans offer the lowest rates and most flexible terms when you qualify. You need a 620 credit score minimum, though most lenders prefer 680+ for investment properties.
Down payments start at 3% for primary homes, but jump to 15-25% for investment properties. Lenders verify your W-2 income, tax returns, and debt-to-income ratio to approve the loan.
You can finance up to 10 properties with conventional loans if your income supports the debt load. Each property adds to your DTI calculation, which eventually caps how much you can borrow.
DSCR loans skip the tax return review entirely. Lenders calculate a debt service coverage ratio by dividing projected rental income by the property's mortgage payment.
You need a ratio above 1.0 for most lenders, meaning rent covers the full PITI payment. Some lenders approve ratios as low as 0.75 if you have strong credit and reserves.
Down payments run 20-25% minimum. Credit score requirements sit around 680, though some lenders go to 660 for strong deals. No limit on how many properties you can finance.
Rates on DSCR loans run 0.5-1.5% higher than conventional. You're paying for the flexibility to avoid income documentation and scale your portfolio without DTI restrictions.
Conventional loans require full income verification and limit how many properties you can finance based on your debt ratios. DSCR loans care only about whether the rent covers the mortgage.
Mount Shasta vacation rentals often work better with DSCR because seasonal income is easier to underwrite through rental projections than personal tax returns. You need higher down payments but get unlimited scalability.
Choose conventional if you're buying a primary home or your first rental property with strong W-2 income. The lower rates save thousands over the loan term when you qualify easily.
Switch to DSCR when you're adding properties to an existing portfolio, have complicated tax returns, or want vacation rentals near Mount Shasta. Self-employed buyers use DSCR to avoid showing two years of tax returns.
Most investors start with conventional for their first 1-3 properties, then move to DSCR as their portfolio grows. The higher rate on DSCR makes sense when conventional lenders hit you with DTI limits.
No. DSCR loans only finance investment properties. You need conventional, FHA, or another program for a home you'll live in as your primary residence.
Conventional loans offer rates 0.5-1.5% lower than DSCR when you qualify. DSCR rates are higher because they skip income verification entirely.
No. DSCR lenders use a rental appraisal or market rent estimate to calculate cash flow. You don't need existing tenant leases or income history.
Conventional requires 620 minimum, though 680+ is standard for rentals. DSCR loans typically need 680, with some lenders accepting 660 for strong deals.
Yes. DSCR loans have no portfolio limits since they don't use DTI calculations. Conventional caps at 10 financed properties regardless of income.