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in Aliso Viejo, CA
Real estate investors in Aliso Viejo have two strong financing options. DSCR loans and hard money loans each serve different investment strategies.
Both are non-QM loans that don't require traditional income verification. Understanding their differences helps you choose the right fit for your Aliso Viejo investment property.
DSCR loans qualify investors based on rental property income rather than personal income. The property's cash flow determines approval, making them ideal for buy-and-hold investors.
These loans offer longer terms, typically 30 years, with more competitive rates. Rates vary by borrower profile and market conditions. They work well for stabilized rental properties in Aliso Viejo.
Hard money loans are short-term, asset-based financing for property acquisition and renovation projects. Lenders focus on the property's value rather than borrower credit or income.
These loans close quickly, often within days, making them perfect for competitive markets. Terms typically run 6 to 24 months. They're designed for fix-and-flip projects or bridge financing in Aliso Viejo.
The main difference is timeline and purpose. DSCR loans are long-term solutions for rental properties. Hard money loans are short-term solutions for quick acquisitions and rehabs.
DSCR loans require the property to generate rental income for qualification. Hard money loans focus on the property's after-repair value. Rates vary by borrower profile and market conditions, but hard money typically costs more.
Closing speed also differs significantly. Hard money loans can close in days. DSCR loans typically take 3 to 4 weeks but offer better long-term rates.
Choose DSCR loans if you're buying rental properties to hold long-term in Aliso Viejo. They offer better rates and longer terms for stabilized income-producing properties.
Choose hard money loans if you need fast funding for fix-and-flip projects. They're also good for properties needing renovation before they can qualify for traditional financing.
Many investors use both strategically. Start with hard money for acquisition and rehab. Then refinance into a DSCR loan once the property is rent-ready.
Yes, both DSCR and hard money loans are available for Aliso Viejo investment properties. Your choice depends on your investment strategy and timeline.
Hard money loans close much faster, often within days. DSCR loans typically take 3 to 4 weeks to close but offer better long-term rates.
DSCR loans typically require 620+ credit scores. Hard money lenders focus more on property value and may accept lower credit scores.
DSCR loans generally offer lower rates for long-term financing. Hard money loans cost more but provide speed and flexibility. Rates vary by borrower profile and market conditions.
Yes, this is a common strategy. Use hard money for acquisition and rehab, then refinance to a DSCR loan once the property generates rental income.