Loading
in Exeter, CA
Exeter's rental market attracts both self-employed buyers and traditional investors. Bank statement and DSCR loans serve different purposes despite both being non-QM products.
Bank statement loans qualify you on deposits flowing through your business accounts. DSCR loans ignore your income entirely and focus only on the property's rent potential.
Most brokers push one or the other without understanding your situation. We see when self-employed buyers should use DSCR and when investors need bank statements.
Bank statement loans calculate income from 12 to 24 months of business or personal account deposits. Lenders apply an expense ratio to your deposits to determine qualifying income.
You need credit scores typically above 620 and at least 10-20% down depending on property type. This works for self-employed borrowers buying primary homes, second homes, or investment properties.
The key advantage: you can qualify using your actual business cash flow without tax returns. This matters when your Schedule C shows low net income due to write-offs but your accounts prove strong deposits.
DSCR loans qualify you based on a property's rental income divided by its mortgage payment. Lenders want a ratio above 1.0, meaning rent covers the full payment.
Your personal income never enters the equation. No tax returns, no pay stubs, no bank statements proving your earnings. The property either cash flows or it doesn't.
This product exists exclusively for investment properties. You cannot use DSCR for a primary residence or second home. Expect 20-25% down minimum and credit scores above 640.
The fundamental split: bank statement loans verify your ability to earn income through business activity. DSCR loans verify the property's ability to generate rent regardless of your income sources.
Bank statement loans allow primary residence purchases. DSCR loans do not. If you're self-employed and buying a home to live in, bank statements are your only non-QM path.
For investment properties, DSCR wins when you have inconsistent personal income or prefer privacy. Bank statements win when the property's rent doesn't hit 1.0 DSCR but your business income can cover the gap.
Use bank statement loans when buying your primary home in Exeter or when rental income alone won't qualify you. Self-employed borrowers with strong deposits but aggressive tax strategies need this option.
Use DSCR loans when buying rental properties with solid rent-to-payment ratios. This fits investors who don't want to share personal financials or who have complex income that's hard to document.
Some Exeter investors use both products in their portfolio. Bank statements for properties with lower rents, DSCR for strong cash flow deals. We run scenarios both ways before you commit.
No. DSCR loans require investment property occupancy only. Even occasional personal use disqualifies the property from DSCR financing.
Rates vary by borrower profile and market conditions. DSCR typically prices slightly better when credit and DSCR ratio are strong, but differences are often minimal.
DSCR loans never require personal tax returns. Bank statement loans skip tax returns but may ask for business returns depending on the lender and loan amount.
Yes, if the property becomes a rental and meets DSCR requirements. Many investors start with bank statements then refinance to DSCR after moving out.
DSCR loans typically close faster since they require less borrower documentation. Bank statement loans need 12-24 months of account records reviewed and verified.