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in Benicia, CA
Both bank statement and DSCR loans skip traditional W-2 income verification, but they serve different borrowers. Bank statement loans work for self-employed owners buying primary or investment homes. DSCR loans focus purely on rental income for investors.
Benicia's market attracts both business owners and real estate investors. Choosing the wrong loan type costs you time and money in a competitive market.
Bank statement loans analyze 12 to 24 months of personal or business bank deposits to calculate income. Lenders apply a percentage to your average monthly deposits, typically 50% for expenses. This works when your tax returns show low income due to deductions.
You can use these loans for primary residences, second homes, or investment properties in Benicia. Minimum credit scores typically start at 660, and you'll need 10% to 20% down depending on property type.
DSCR loans qualify you based on the rental property's income versus its debt payments. Lenders divide monthly rent by the mortgage payment (PITI). A ratio above 1.0 means the property covers its own costs, which strengthens approval odds.
These loans only work for investment properties, not homes you'll live in. Credit requirements start around 620, and most lenders want 20% to 25% down. Your personal income never enters the equation.
Bank statement loans require income documentation through deposits. DSCR loans need an appraisal showing market rent potential. Bank statement works for owner-occupied homes; DSCR doesn't. DSCR ignores your tax returns entirely; bank statement loans still look at your deposit history.
Rates vary by borrower profile and market conditions, but DSCR loans often price slightly higher than bank statement loans due to investment property risk. Bank statement loans give you more property type flexibility. DSCR loans give you cleaner underwriting if the rental numbers work.
Choose bank statement loans if you're self-employed, buying a primary residence or second home in Benicia, or need to show income from business deposits. Choose DSCR if you're buying a rental property and the rent covers the mortgage payment with room to spare.
Most self-employed buyers default to bank statement loans because they work for any property type. Pure investors prefer DSCR when rental numbers are strong, since it avoids personal income scrutiny entirely. Some borrowers qualify for both and should compare rates.
Yes, bank statement loans work for investment properties, second homes, and primary residences. DSCR loans only cover rentals.
Rates vary by borrower profile and market conditions. Bank statement loans often price slightly lower than DSCR due to property type flexibility.
Bank statement lenders may request returns to verify self-employment. DSCR loans skip tax returns entirely and focus only on rental income.
DSCR loans typically close faster since underwriters only review property rental income and appraisal. Bank statement loans need more document review.
No, bank statement loans still verify your income through deposits. DSCR loans ignore personal income completely if rental numbers qualify.