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in La Palma, CA
Both loans skip personal income verification. That's where the similarity ends.
La Palma investors use these tools differently. The right choice depends on your exit strategy.
DSCR loans qualify you based on rental income. Lenders look at what the property earns, not what you earn.
Most lenders want a DSCR of 1.0 or higher. That means rent covers the monthly payment. Go above 1.25 and you'll get better terms.
Hard money lenders care about the property's value. Your credit score matters less than the deal itself.
These loans close fast — sometimes in days. But they're short-term, typically 6 to 24 months, and carry higher rates.
Local decision guide
Use this comparison to weigh DSCR Loans and Hard Money Loans through local payment fit, eligibility, documentation, and timing before choosing a path in La Palma.
Both loans skip personal income verification. That's where the similarity ends.
La Palma investors use these tools differently. The right choice depends on your exit strategy.
DSCR loans qualify you based on rental income. Lenders look at what the property earns, not what you earn.
DSCR loans are built to hold. Hard money is built to move. Using the wrong tool costs you money.
Rates on hard money run significantly higher than DSCR. That's the cost of speed and flexibility. Rates vary by borrower profile and market conditions.
Buying a La Palma rental and holding it? DSCR is your loan. The math is simple — if rent covers the payment, you qualify.
Flipping or bridging to a refi? Hard money gets you there fast. Just have your exit locked before you close.
No. DSCR loans are for stabilized rentals with tenants. Flips need hard money or a short-term bridge product.
DSCR lenders typically want 620 or higher. Hard money lenders focus more on the deal — credit matters less.
Experienced hard money lenders can close in 5 to 10 business days. DSCR loans usually take 3 to 4 weeks.
Yes, and many investors do exactly that. Fix the property, stabilize rent, then refinance into a 30-year DSCR.
DSCR loans carry lower rates than hard money. Rates vary by borrower profile and market conditions.
Both require skin in the game. DSCR typically needs 20-25% down. Hard money lenders focus on LTV — usually 65-75%.