The details
The key distinction is occupancy and income source: bank statement loans are for owner-occupied homes, DSCR loans are for income-producing properties.
Some borrowers use both across different purchases, for example a bank statement loan for their home and DSCR loans for rentals.
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Related loan programs
Bank Statement Loans
A bank statement loan is a non-QM mortgage that calculates self-employed income from 12 or 24 months of personal or business bank deposits instead of tax returns.
DSCR Loans
A DSCR loan is an investment-property mortgage that qualifies you on the property’s rental income divided by its monthly payment (the debt service coverage ratio).
Non-QM Loans
A non-QM (non-qualified mortgage) loan is any mortgage that documents income or credit outside the standard Qualified Mortgage rules, using bank statements, a P&L, 1099s, assets or rent instead of W-2s and tax returns.
More answers
- Is there such a thing as a free mortgage?
- Can you get an interest-free mortgage?
- What is a no-closing-cost mortgage?
- What is the difference between lender-paid and borrower-paid compensation?
- What does “lender-backed” mean on a mortgage?
- Mortgage broker or bank: which is better?
- How is DSCR calculated for a mortgage?
- What DSCR ratio do I need to qualify?