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in Vallejo, CA
Vallejo investors and self-employed borrowers often don't fit traditional mortgage boxes. Bank statement and DSCR loans both skip W-2 verification, but they solve different problems.
Bank statement loans work for business owners buying primary homes or second properties. DSCR loans are built specifically for rental investors who want property income to do the talking.
Bank statement loans analyze 12 to 24 months of business or personal bank deposits to calculate income. Lenders average your deposits and apply a percentage factor, typically 50% for personal accounts or 75% for business accounts.
This option works for contractors, real estate agents, consultants, and business owners buying homes they'll live in. You need 10-20% down and credit scores around 620-640 minimum, depending on the lender.
The approval process focuses on cash flow consistency and deposit patterns. Large irregular deposits get scrutinized or excluded from income calculations.
DSCR loans qualify based solely on whether the rental income covers the mortgage payment. Lenders calculate a ratio: monthly rent divided by monthly debt service (mortgage, taxes, insurance, HOA).
Most lenders want a DSCR of 1.0 or higher, meaning rent equals or exceeds the full housing payment. Some allow ratios as low as 0.75 with larger down payments.
Your personal income, tax returns, and employment history don't matter. The property either cash flows or it doesn't. This works perfectly for investors with strong rental portfolios but complex personal tax situations.
Bank statement loans require your business deposits as proof of personal income. DSCR loans don't care about your income at all—only the property's rental potential matters.
Use bank statement loans when buying a home you'll occupy or when your business income is strong but doesn't show up on tax returns. Use DSCR when buying pure investment property in Vallejo's rental market.
Down payment requirements differ too. Bank statement loans often allow 10-15% down for primary homes. DSCR loans typically start at 20-25% down, sometimes more if the property barely cash flows.
Choose bank statement loans if you're self-employed and buying a home in Vallejo to live in. This option makes sense when your bank deposits tell a better income story than your tax returns do.
Choose DSCR loans if you're buying Vallejo rental property and want the simplest approval path. This works especially well for investors with multiple properties or those who write off significant business expenses.
Some borrowers could qualify for both. A Vallejo contractor buying a duplex to house-hack might use bank statements. An investor buying the same duplex as pure rental property would likely prefer DSCR.
Yes, but you'll face higher rates and larger down payments than you would on a primary home. DSCR loans typically offer better terms for pure investment properties.
Most lenders require the property to be rent-ready at closing. If repairs are needed, you may need a renovation loan or fix-and-flip financing instead.
Rates vary by borrower profile and market conditions, but DSCR loans often price slightly better for strong cash-flowing properties. Bank statement rates depend heavily on your credit and down payment.
Yes, neither requires personal tax returns for income qualification. That's the main advantage both programs share for self-employed borrowers and investors.
Some lenders accept ratios as low as 0.75 with 25-30% down. You'll pay higher rates, and the loan amount may be capped based on the property's income potential.