Question 1

Can I refinance from hard money to a DSCR loan?

Accepted Answer

Yes, this is common. Many investors use hard money for renovations, then refinance into a DSCR loan for long-term rental financing once the property is stabilized and generating income.

Question 2

Which loan type has lower rates in Lafayette?

Accepted Answer

DSCR loans offer significantly lower rates, typically similar to conventional mortgages. Hard money rates run higher due to the short-term nature and faster approval process. Rates vary by borrower profile and market conditions.

Question 3

Do both loans require down payments?

Accepted Answer

Yes. DSCR loans typically require 20-25% down for investment properties. Hard money usually requires 25-35% down based on the property's current or after-repair value.

Question 4

Which is easier to qualify for with lower credit?

Accepted Answer

Hard money lenders focus on property value over credit scores, making them more accessible for investors with credit challenges. DSCR loans typically require credit scores of 620 or higher.

Question 5

Can I use either for a primary residence in Lafayette?

Accepted Answer

DSCR loans are specifically for investment properties that generate rental income. Hard money also focuses on investment properties and commercial projects rather than primary residences.

DSCR Loans vs Hard Money Loans in Lafayette: Which Investor Loan Fits Your Strategy?