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in Vacaville, CA
Vacaville investors face a clear choice: conventional loans verify your W-2 income, while DSCR loans qualify you on rental income alone. Most owner-occupants pick conventional for lower rates and standard approval.
Investment properties flip this logic. DSCR loans ignore your tax returns and focus only on whether the rent covers the mortgage. That matters in Vacaville's rental market where property cash flow drives approval.
Conventional loans require 620+ credit and full income documentation through tax returns or pay stubs. You'll need 3-5% down for primary homes, 15-25% for investment properties.
Rates typically run 0.5-1% lower than DSCR options because these loans carry less lender risk. Fannie Mae and Freddie Mac set the guidelines, which means predictable underwriting across most lenders.
DSCR loans qualify you on one number: monthly rent divided by monthly mortgage payment. You need a ratio above 1.0, meaning rent covers the full payment including taxes and insurance.
No W-2s, no tax returns, no explaining business write-offs. Lenders want 20-25% down, 680+ credit, and proof the property generates enough rent. Perfect for self-employed borrowers or investors with complex returns.
Rate difference runs 0.75-1.5% between these loans. Conventional wins on cost but demands full income proof. DSCR trades higher rates for zero personal income verification.
Down payment splits along property use. Conventional allows 3-5% down on primary homes but jumps to 15-25% on rentals. DSCR always requires 20-25% down since every loan backs an investment property.
Buy a Vacaville primary home with W-2 income? Conventional wins every time on rate and down payment. Investment property with clean tax returns? Still conventional for cheaper money.
DSCR makes sense when you're self-employed with heavy write-offs, own multiple rentals, or can't document income traditionally. The rate premium buys approval based purely on whether your Vacaville rental covers the payment.
No. DSCR loans only work for investment properties generating rental income. Primary homes need conventional, FHA, or VA financing.
Both take 25-35 days typically. DSCR skips income verification but requires rental appraisals. Timelines end up similar despite different underwriting.
Yes. Conventional caps at 10 financed properties total. DSCR has no hard limit since each property qualifies independently without debt-to-income ratios.
740+ credit unlocks top-tier pricing. You can qualify at 620 but expect rate hits of 0.5-1.5% compared to higher scores.
Yes through cash-out refinance. Many Vacaville landlords start conventional then refinance to DSCR when they need equity without income verification.