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in Tulare, CA
Tulare buyers face a clear fork: conventional financing for owner-occupied homes or DSCR loans for rental properties. The difference isn't just paperwork—it's how lenders measure your ability to repay.
Conventional loans look at your W-2, tax returns, and debt-to-income ratio. DSCR loans ignore your personal income entirely and focus on whether the rental property pays for itself.
Conventional loans work for primary residences, second homes, and investment properties where you document traditional income. You need 620+ credit for most approvals, and rates tend to be the lowest available in Tulare.
Down payments start at 3% for first-time buyers and 5% for repeat buyers on primary homes. Investment properties require 15-25% down. Lenders cap your total debt at 43-50% of gross monthly income.
DSCR loans eliminate income verification completely. Lenders calculate the property's monthly rent divided by its monthly debt obligations. A ratio above 1.0 means the property covers its own mortgage.
You need 20-25% down and 660+ credit for most DSCR approvals. Rates run 0.5-1.5% higher than conventional, but you can close on multiple properties in a year without hitting loan count limits.
The rate gap matters. Conventional loans in Tulare price 0.5-1.5% lower than DSCR options—rates vary by borrower profile and market conditions. On a $400K loan, that difference costs $200-400 monthly.
Underwriting speed differs too. DSCR loans close in 14-21 days because there's no employment verification or tax transcript wait. Conventional loans need 21-30 days to gather and review income documents.
Choose conventional if you're buying a home to live in or you're a W-2 earner with clean tax returns buying 1-4 rental units. The rate savings compounds over 30 years and justifies the paperwork.
Pick DSCR if you're self-employed with complex tax returns, scaling a rental portfolio past 10 properties, or buying a property that rents for enough to cover its mortgage. The property does the qualifying work.
No. DSCR loans require the property to be rented to a third party. If you're occupying the home, conventional financing is your only option among these two.
DSCR loans typically close in 14-21 days. Conventional loans need 21-30 days due to income verification and appraisal requirements.
Yes. Both conventional and DSCR lenders order full appraisals to confirm property value and condition before funding.
Rarely. Most DSCR lenders require 20-25% down. Conventional loans offer much lower down payment options for owner-occupied properties.
DSCR loans typically require 660+ credit. Conventional loans approve borrowers at 620+ for most programs, making them more accessible for lower credit scores.