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in Rocklin, CA
Rocklin investors often face a choice between DSCR and hard money loans. Both skip the W-2 income requirements that sink traditional mortgages, but they serve different investment strategies.
DSCR loans work for buy-and-hold investors who want long-term financing. Hard money fits fix-and-flip projects where speed matters more than cost.
DSCR loans qualify you based on rental income, not your tax returns. If the property generates enough rent to cover the mortgage payment, you're eligible regardless of what your 1040 shows.
You'll get 30-year fixed terms with rates typically 1-2% above conventional loans. Most lenders want a 1.0 DSCR minimum, meaning rent covers 100% of the monthly payment. Expect 20-25% down and a 620 credit score floor.
Hard money loans fund in days, not weeks. Private lenders care about the property's after-repair value, not your income or credit score. They'll lend on properties that need heavy work.
Expect 10-12% rates and 2-4 points upfront. Terms run 6-24 months with interest-only payments. Most hard money lenders cap loan-to-value at 65-75% of ARV and want an exit strategy before closing.
Cost separates these loans more than anything. Hard money runs 10-12% with points; DSCR sits around 7-8% with lower fees. That spread makes sense when you factor in loan duration.
DSCR loans require rent rolls and completed properties. Hard money lenders fund vacant houses that need permits. Speed matters too: hard money closes in a week, DSCR takes 3-4 weeks minimum.
Choose DSCR loans when you're buying turnkey rentals in Rocklin or refinancing properties you plan to hold. The lower rate saves thousands over 30 years, and fixed payments make budgeting simple.
Pick hard money for fix-and-flip projects or properties that need major work before they'll rent. The speed lets you compete with cash buyers, and short terms mean high rates don't compound as much damage. Just have your sale or refinance exit mapped before you close.
Not really. DSCR lenders require rental income verification, which means the property needs tenants. Hard money works better for flips since it funds based on after-repair value.
Hard money typically closes in 5-10 days. DSCR loans take 3-4 weeks minimum due to appraisal requirements and rent roll verification.
Neither requires W-2s or tax returns. DSCR uses property rent, hard money uses property value. Both skip the personal income verification that blocks most investors.
DSCR lenders want 620 minimum, sometimes 640. Hard money cares less about credit and more about your exit strategy and down payment.
Yes, this is common. Investors use hard money to buy and renovate, then refinance into a DSCR loan once the property is rented and stabilized.