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in Tulare, CA
Self-employed borrowers and real estate investors in Tulare often hit the same wall with conventional loans. Tax write-offs tank your qualifying income, even when cash flow is strong.
Bank statement loans and DSCR loans both skip tax returns, but they serve different buyers. One proves your personal income through deposits. The other ignores your income entirely and focuses on rental cashflow.
Bank statement loans let you qualify using 12 to 24 months of business or personal bank statements. Lenders calculate income from your average monthly deposits, not what you report to the IRS.
This works for self-employed buyers purchasing a primary residence, second home, or investment property in Tulare. You need decent credit—usually 620 minimum—and 10% to 20% down depending on the property type.
DSCR loans qualify you based solely on the rental property's income, not yours. Lenders divide monthly rent by the mortgage payment to get a debt service coverage ratio—usually 1.0 or higher to approve.
These loans only work for investment properties, not homes you'll live in. DSCR is the move when you have weak personal income but strong rental numbers, or when you're building a portfolio and don't want every new property hitting your debt-to-income ratio.
Bank statement loans require proving personal income through deposits. DSCR loans don't care what you make—they only check if rent covers the mortgage. That's the fundamental split.
Bank statement works for any property type you can occupy or rent out. DSCR is investment-only. Rates run similar on both, but DSCR often requires 20-25% down while bank statement can go as low as 10% for owner-occupied homes.
Use bank statement loans when buying a home you'll live in or when you need to prove income for a rental. If you're self-employed buying in Tulare and want the flexibility of any property type, this is your path.
Use DSCR when buying pure investment property with strong rental income. It's faster—no need to gather two years of statements or explain every deposit. If the property cashflows and you have 20-25% down, DSCR keeps your personal finances out of underwriting.
Yes. Bank statement loans work for investment properties, though you'll need 15-20% down. DSCR might be simpler if the rental income is strong.
Rates are similar since both are non-QM products. Expect 1-2 points above conventional rates. Your credit score and down payment affect pricing more than loan type.
No. You can close DSCR loans in your personal name. Many investors prefer LLC ownership for liability reasons, but it's not required for approval.
They average your total deposits over 12 or 24 months, then apply an expense factor—usually 25-50%—to account for business costs. The remainder is your qualifying income.
Most lenders want 1.0 or higher, meaning rent equals or exceeds the full mortgage payment. Some programs go down to 0.75 DSCR with larger down payments.