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in Hanford, CA
Hanford investors eyeing rental properties face a clear choice: DSCR loans for long-term holds or hard money for quick flips. Both skip traditional income verification, but they serve completely different strategies.
DSCR loans use your property's rental income to qualify. Hard money lenders focus on the asset value and move faster. Your timeline and exit plan determine which makes sense.
DSCR loans qualify you based on rental income divided by the mortgage payment. Most lenders want a ratio of 1.0 or higher, meaning rent covers the full payment. Rates typically run 1-2% above conventional loans.
These work for investors buying properties they plan to rent long-term. You'll need 20-25% down and decent credit, usually 640 minimum. Closing takes 30-45 days, similar to traditional mortgages.
Hard money loans fund in 7-14 days based primarily on property value and your equity position. Lenders charge 9-12% rates plus 2-4 points upfront. Terms run 6-24 months, not 30 years.
These loans cover fix-and-flip projects or bridge financing when you need fast closes. Expect to put down 25-35% and show a clear exit strategy. Credit matters less than the deal itself and your renovation budget.
Hard money costs 3-4 times more in interest than DSCR loans. But it funds in half the time and allows major renovations mid-loan. DSCR loans offer 30-year fixed rates but require properties in rent-ready condition.
DSCR loans underwrite the rental income carefully, ordering appraisals that include rent comparables. Hard money lenders care about after-repair value and your track record. One builds long-term cash flow, the other profits from quick turnarounds.
Choose DSCR if you're buying a rental in Hanford that's already habitable and you plan to hold it for years. The lower rate matters when you're collecting rent for the next decade. You need patience for the 30-45 day close.
Pick hard money when you're acquiring a distressed property that needs significant work before tenants move in. The speed lets you beat cash buyers. Just make sure your renovation timeline and resale plan fit within 12-18 months.
Yes, this is common for fix-and-flip investors who decide to keep the property. You refinance once renovations are done and tenants are in place.
Hard money has lower credit requirements, often accepting scores below 600. DSCR lenders typically want 640+ and verifiable rental income projections.
DSCR loans do, as long as the numbers work. Hard money lenders usually want to see previous deals or require experienced partners on your first project.
No, both are investment-property-only products. You'll need a traditional mortgage or owner-occupied renovation loan if you plan to live there.
DSCR loans require 20-25% down plus 2-3% closing costs. Hard money demands 25-35% down plus 2-4 points and higher closing fees.