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in San Jacinto, CA
San Jacinto investors have two powerful financing options for rental properties and fix-and-flip projects. DSCR loans and hard money loans serve different investment strategies and timelines.
Both are non-QM loans that don't rely on traditional W-2 income verification. Understanding their key differences helps you choose the right financing for your San Jacinto real estate goals.
DSCR loans qualify investors based on rental property income rather than personal income. The property's monthly rent must cover the mortgage payment and expenses.
These loans work well for buy-and-hold investors in San Jacinto seeking stable, long-term financing. Terms typically span 15 to 30 years with lower rates than short-term options. Rates vary by borrower profile and market conditions.
DSCR loans require the property to generate enough rental income for approval. No tax returns or pay stubs are needed, making them ideal for self-employed investors.
Hard money loans are short-term, asset-based financing primarily used for property acquisition and renovations. Lenders focus on the property's current or future value rather than borrower income.
These loans fund quickly, often within days, making them perfect for competitive San Jacinto markets. Terms usually run 6 to 24 months with higher interest rates. Rates vary by borrower profile and market conditions.
Hard money suits fix-and-flip investors who need fast capital and plan to refinance or sell quickly. The property itself serves as collateral for the loan.
The biggest difference is loan duration. DSCR loans offer long-term financing for rental income properties. Hard money provides short-term capital for quick flips and renovations.
Qualification criteria also differ significantly. DSCR lenders evaluate the property's rental income and debt coverage ratio. Hard money lenders assess the property's current and after-repair value.
Cost structures vary considerably between these options. DSCR loans typically have lower rates but stricter income requirements. Hard money features higher rates but faster approval and funding timelines.
Choose DSCR loans if you're buying rental properties in San Jacinto for steady cash flow. They work best when the property generates strong rental income and you plan to hold long-term.
Hard money loans suit investors who need quick funding for time-sensitive opportunities. Select this option for fix-and-flip projects, property renovations, or when you need to close fast in competitive situations.
Your investment timeline determines the best choice. Long-term rental investors benefit from DSCR stability. Active flippers need hard money's speed and flexibility despite higher costs.
Yes, many investors use hard money to purchase and renovate, then refinance into a DSCR loan for long-term rental income. This strategy combines speed with stability.
DSCR loans typically offer lower rates than hard money loans. However, rates vary by borrower profile and market conditions. Hard money's speed often justifies the higher cost.
Neither requires perfect credit, though standards vary by lender. DSCR loans typically need mid-600s credit scores. Hard money lenders may accept lower scores since they focus on property value.
Hard money loans often close in 5-10 days. DSCR loans typically take 21-30 days. Choose based on whether you prioritize speed or lower long-term costs.
DSCR loans typically require 20-25% down for investment properties. Hard money lenders may require 25-35% down or more, depending on the project and property condition.