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in Chino Hills, CA
Chino Hills investors have two powerful financing options for rental properties and fix-and-flip projects. DSCR loans and hard money loans each serve different investment strategies in San Bernardino County's competitive market.
Both are non-QM loans that don't rely on W-2 income for approval. Understanding their differences helps you choose the right financing for your Chino Hills investment property goals.
DSCR loans qualify investors based on rental property income rather than personal income. The property's rental cash flow determines your loan approval, making them ideal for long-term rental investments.
These loans work well for buy-and-hold investors in Chino Hills who want competitive terms. Rates vary by borrower profile and market conditions, but terms typically extend 30 years like traditional mortgages.
You don't need to prove employment income or show tax returns. The property's debt service coverage ratio is calculated by dividing monthly rent by monthly mortgage payment.
Hard money loans are short-term, asset-based financing primarily used for property acquisition and renovation projects. These loans focus on the property's value rather than your financial profile.
Chino Hills investors use hard money for fix-and-flip projects and quick closings. Terms typically range from 6 to 24 months with interest-only payments during the renovation phase.
Approval happens fast, often within days, and funding can close in one to two weeks. Rates vary by borrower profile and market conditions but are higher than traditional loans due to the speed and flexibility.
The main difference is time horizon and purpose. DSCR loans offer long-term financing for rental properties, while hard money provides short-term capital for acquisition and renovations.
DSCR loans require the property to generate rental income for qualification. Hard money loans don't require rental income and fund based on the property's after-repair value.
Interest rates and terms differ significantly between the two. DSCR loans offer lower rates with 30-year amortization, while hard money features higher rates with short payoff timelines.
Choose DSCR loans if you're buying rental property in Chino Hills for long-term income. They work best when you want permanent financing with manageable monthly payments.
Hard money makes sense for fix-and-flip projects or when you need fast funding. Use this option when timing matters or the property needs significant renovation before it can qualify for traditional financing.
Some investors use both strategically: hard money to acquire and renovate, then refinance into a DSCR loan. This approach maximizes flexibility throughout your investment timeline in San Bernardino County.
DSCR loans require rental income for qualification, making them unsuitable for fix-and-flip projects. Hard money loans are designed specifically for renovation and quick-turn investments.
Hard money loans close much faster, often in one to two weeks. DSCR loans typically take 30 to 45 days, similar to traditional mortgage timelines.
Neither DSCR nor hard money loans require W-2s or employment verification. DSCR uses rental income, while hard money focuses on property value and equity.
Yes, this is a common strategy. Investors use hard money to acquire and renovate, then refinance into a DSCR loan for long-term rental financing.
DSCR loans typically offer lower rates due to longer terms and lower risk. Hard money rates are higher but provide speed and flexibility for short-term needs.