Question 1

Can I refinance from hard money to a DSCR loan?

Accepted Answer

Yes, this is a common strategy. After renovating and stabilizing a property with hard money, investors refinance to DSCR loans for better rates and long-term cash flow.

Question 2

Which loan has stricter credit requirements?

Accepted Answer

DSCR loans typically require 640+ credit scores and focus on debt coverage ratios. Hard money lenders are more flexible with credit but scrutinize equity and exit strategy instead.

Question 3

Do these loans work for primary residences in Walnut Creek?

Accepted Answer

No, both are investor-focused products. DSCR loans require rental properties, and hard money is for investment properties or short-term scenarios, not owner-occupied homes.

Question 4

What down payment do I need for each option?

Accepted Answer

DSCR loans typically require 20-25% down on investment properties. Hard money loans need 25-35% down, with the exact amount depending on property value and condition.

Question 5

How do closing costs compare between these loans?

Accepted Answer

Hard money loans have higher upfront costs including points and fees due to the speed and risk. DSCR loans have more traditional closing costs similar to conventional mortgages.

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