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in San Dimas, CA
San Dimas investors shopping rental properties face a choice between two non-QM options. DSCR loans use property cash flow to qualify, while hard money lenders focus on equity and exit strategy.
Both skip tax returns and W-2s, but they serve different timelines. DSCR works for stable rentals you plan to hold. Hard money funds quick flips or heavy rehabs where speed beats cost.
DSCR loans qualify based on rental income covering the mortgage payment. Lenders want a ratio above 1.0, meaning rent exceeds the PITI payment by at least a small margin.
Terms mirror conventional loans: 30-year fixed rates, LTVs up to 80%, and interest-only options. Rates run 1-2% above agency loans. You close in 3-4 weeks, perfect for rental acquisitions in San Dimas neighborhoods.
Hard money lenders fund based on after-repair value and your equity position. They care about the property and your exit plan, not your credit score or rental projections.
Expect 8-12% rates, 2-4 points upfront, and 6-12 month terms. LTV maxes around 65-75% of purchase price. Approvals happen in days, and you can close in a week when competing for distressed San Dimas properties.
Cost separates these options more than anything. DSCR rates start around 7-8% with minimal fees. Hard money hits 10-12% plus 2-4 points, costing $8,000-$16,000 upfront on a $400,000 loan.
Timeline matters too. DSCR takes a month and requires appraisals, rent schedules, and property inspections. Hard money skips most underwriting and funds in under two weeks. You pay a premium for that speed and flexibility.
Choose DSCR when buying a rental property you plan to hold and refinance later. It works for turnkey San Dimas homes or light value-add deals where rents cover the payment immediately.
Pick hard money for fix-and-flip projects, distressed purchases, or bridge financing. If you're competing against cash offers or need to close before securing long-term financing, hard money wins despite the cost.
Yes, this is common for value-add deals. Acquire with hard money, complete renovations, stabilize rent, then refinance into a 30-year DSCR loan.
Hard money approves faster with less documentation. DSCR requires appraisals and rent analysis but offers better long-term rates.
No. DSCR qualifies on property income, hard money on property value and equity. Neither pulls tax returns or pay stubs.
DSCR typically requires 620-660 minimum. Hard money lenders care less about credit, focusing instead on deal structure and exit strategy.
No. Both are designed for investment properties only. You need conventional or government-backed financing for owner-occupied homes.