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in Vacaville, CA
Most Vacaville self-employed borrowers and investors don't qualify for conventional loans. Bank statement and DSCR loans both skip W-2 verification, but they work completely differently.
Bank statement loans prove your income from deposits. DSCR loans ignore your income entirely and qualify you on rental property cash flow.
Both options serve Vacaville's growing investor and entrepreneur community. The right choice depends on whether you're buying your own home or a rental property.
Bank statement loans use 12 to 24 months of deposits to calculate your income. Lenders average your monthly deposits and apply them as qualifying income.
Most self-employed Vacaville borrowers use this for primary homes or second properties. You can also use it for investment properties if you want to count personal income.
Credit minimums typically sit at 620, though most approvals happen above 660. Down payments start at 10% for owner-occupied and 20% for investment properties.
DSCR loans qualify you based solely on rental income the property generates. Lenders divide monthly rent by the mortgage payment to get your debt service coverage ratio.
A ratio above 1.0 means rent covers the payment. Most lenders approve ratios as low as 0.75, meaning you can qualify even if rent falls slightly short.
This works for Vacaville investors buying rental properties who don't want to verify personal income. You never submit tax returns or bank statements about yourself.
Credit requirements run higher than bank statement loans. Most lenders want 680 minimum, and down payments start at 20% for single-family rentals.
The biggest split is property use. Bank statement loans work for homes you live in or rent out. DSCR loans only work for investment properties.
Income verification goes opposite directions. Bank statement loans require proving your deposits. DSCR loans require proving the property's rental income through a lease or appraisal.
Credit and down payment requirements favor bank statement loans slightly. You can get approved with 620 credit and 10% down for owner-occupied properties.
DSCR loans typically demand 680 credit and 20% down minimum. But you skip all personal financial documentation, which matters if your tax returns show low income or heavy write-offs.
Choose bank statement loans if you're buying a primary home in Vacaville or want to use personal income to qualify. This works for self-employed borrowers with strong deposits who need owner-occupied financing.
Choose DSCR loans if you're buying Vacaville rental property and want to avoid personal income verification. This fits investors with strong credit but tax returns that show minimal income.
Most Vacaville investors with multiple properties prefer DSCR because it doesn't hit your debt-to-income ratio. Your rental portfolio can grow without personal income limiting approvals.
Self-employed borrowers buying their own home almost always use bank statement loans. DSCR doesn't work for primary residences under any circumstances.
Yes, bank statement loans work for investment properties. You'll need 20% down and 680+ credit, similar to DSCR requirements but with personal income verification.
Rates vary by borrower profile and market conditions. DSCR rates typically run 0.25-0.50% higher because lenders take more risk without verifying personal income.
No, first-time investors qualify for DSCR loans. Lenders use appraised market rent, not your landlord experience, to calculate the coverage ratio.
Yes, many Vacaville investors use bank statement loans for their primary home and DSCR loans for rentals. Each property qualifies separately with different requirements.
Most lenders approve ratios down to 0.75, meaning rent can fall 25% short of the payment. You'll face higher rates below 1.0 coverage.