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in La Habra Heights, CA
La Habra Heights investors often need financing that doesn't rely on W-2 income. Both DSCR and hard money loans skip traditional employment verification, but they serve completely different purposes.
DSCR loans work for cash-flowing rentals you plan to hold long-term. Hard money works for fix-and-flip projects or bridge financing when speed matters more than rate.
DSCR loans qualify you based on the rental income a property generates, not your tax returns. If the rent covers 1.0x to 1.25x the mortgage payment, you're typically approved regardless of personal income.
These are 30-year fixed loans with rates 1-2% above conventional mortgages. You need 20-25% down and a 660+ credit score. They work best for stabilized rental properties in residential neighborhoods across La Habra Heights.
Hard money loans fund based on the property's after-repair value, not income or credit. Lenders care about the deal itself and your exit plan—whether that's a refinance or quick sale.
These are short-term loans, usually 6-24 months, with rates from 8-12% plus points. You can close in 5-10 days. They're designed for distressed properties, major rehabs, or situations where traditional financing won't work fast enough.
DSCR loans cost less but take longer—expect 3-4 weeks to close with full appraisals and underwriting. Hard money costs significantly more but can close in a week with minimal documentation.
DSCR requires the property to already produce rental income or be rent-ready. Hard money works on properties that need serious work or can't qualify for traditional financing. If you're buying a fixer in La Habra Heights to renovate and flip, hard money is your only realistic option.
Choose DSCR if you're buying a turnkey rental or a property that needs minor cosmetic updates before it's rent-ready. The lower rate and 30-year term make it sustainable for long-term cash flow in residential areas.
Choose hard money if you're flipping, doing a major rehab, or need to close fast on a competitive deal. The high cost only makes sense if you're exiting within 12 months—either through a sale or refinance into a DSCR or conventional loan.
Yes, that's a common strategy. Once the property is rent-ready and generating income, you can refinance into a DSCR loan at a much lower rate.
DSCR has more traditional underwriting with credit and income ratio requirements. Hard money focuses primarily on the property value and your exit plan.
Yes, both DSCR and hard money lenders commonly work with LLC borrowers. This is standard for investment property financing in La Habra Heights.
DSCR loans typically go up to $3-4 million. Hard money varies by lender but often caps at $2-3 million depending on the deal.
No, both are strictly for investment properties. DSCR requires rental income documentation, and hard money lenders only fund investment deals.