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in Fairfield, CA
Self-employed Fairfield business owners and rental property investors both use non-QM loans. But they qualify differently.
Bank statement loans prove income through deposits. DSCR loans ignore your income entirely and focus on rental cash flow.
Most borrowers fit one approach but not both. Picking wrong costs you weeks and loan fees.
Bank statement loans use 12 to 24 months of personal or business bank statements to calculate income. Lenders average your deposits and apply a percentage based on your business type.
You need strong credit—usually 660 minimum—and consistent deposits. Self-employed borrowers with tax write-offs that reduce AGI use these because deposits show true earning power.
Rates run higher than conventional but you can finance owner-occupied homes or investment properties. Most lenders cap at 85-90% LTV depending on property type and credit strength.
DSCR loans qualify you based solely on rental income versus the property's debt payment. Lenders want a ratio of 1.0 or higher—meaning rent covers the mortgage.
Your personal income and tax returns don't matter. You can have zero W-2 income and still qualify if the property cash flows.
Minimum credit sits around 620-660 depending on the lender. Most DSCR programs require 20-25% down and only work for investment properties—no owner occupancy allowed.
Bank statement loans verify your ability to earn. DSCR loans verify the property's ability to pay for itself.
If you're buying a primary residence in Fairfield, bank statement is your only option. DSCR programs don't allow owner occupancy under any circumstance.
Bank statement loans usually need less down—sometimes 10-15% for strong borrowers. DSCR loans start at 20% down and go up from there if your ratio is weak.
Use bank statement if you're self-employed and buying a home you'll live in. Also use it if you're an investor but your rental property doesn't cash flow yet.
Use DSCR if you're buying a rental property that's already producing income. Especially useful if your personal income is low or complicated but the property performs well.
Many Fairfield investors own multiple rentals and use DSCR to avoid showing personal income on every deal. Self-employed buyers living in the home default to bank statement every time.
Yes, but for different properties. Use bank statement for your primary residence and DSCR for rental properties you're acquiring.
Rates vary by borrower profile and market conditions. DSCR often prices slightly better if your ratio is strong because the lender sees less risk.
Bank statement loans sometimes ask for returns to verify you filed. DSCR loans never look at personal tax returns at all.
Yes, both work for refinances. DSCR refinances are common for investors pulling equity from performing rentals without income verification.
You'll need a larger down payment or a co-borrower. Some lenders go as low as 0.75 DSCR but expect rate hits and 30%+ down.