Question 1

Can I use DSCR for a vacation rental in Carmel?

Accepted Answer

Yes, as long as rental income covers 125% of the mortgage payment. Lenders use projected rental income based on comparable properties.

Question 2

Do hard money lenders check credit scores?

Accepted Answer

Most don't. They care about property value and your exit strategy. Some may glance at credit but won't decline based on score alone.

Question 3

Which loan type has lower closing costs?

Accepted Answer

DSCR loans have lower total costs. Hard money charges 2-4 points upfront plus higher rates, but you pay for speed and flexibility.

Question 4

Can I refinance hard money into DSCR?

Accepted Answer

Yes, once the property is renovated and rented. Most investors use this strategy to reduce carrying costs after the flip phase.

Question 5

Do both loans require appraisals?

Accepted Answer

Yes. DSCR lenders need a full appraisal. Hard money lenders often order a broker price opinion or quick appraisal to confirm value.

DSCR Loans vs Hard Money Loans in Carmel By The Sea: Which Fits Your Investment Strategy?