Loading
in Rialto, CA
Rialto real estate investors have two popular financing options: DSCR loans and hard money loans. Both are non-QM products that don't require traditional income verification.
DSCR loans focus on rental income potential for long-term holds. Hard money loans prioritize property value for quick transactions. Your timeline and goals determine which works best.
Understanding the core differences helps you choose the right financing tool. Each loan type serves distinct investment strategies in San Bernardino County's market.
DSCR loans qualify investors based on rental property income rather than personal income. The property's cash flow must cover the mortgage payment with room to spare.
These loans work well for long-term rental property investors in Rialto. Terms typically span 15 to 30 years with fixed or adjustable rates.
You don't need W-2s or tax returns for qualification. The debt service coverage ratio compares monthly rent to monthly debt obligations. Rates vary by borrower profile and market conditions.
Hard money loans are short-term, asset-based financing for real estate investors. Lenders focus on the property's current and after-repair value, not your income.
These loans excel for fix-and-flip projects and quick acquisitions in Rialto. Terms usually run 6 to 24 months with higher interest rates than traditional loans.
Approval happens fast, often within days rather than weeks. Hard money works when speed matters more than cost. Rates vary by borrower profile and market conditions.
Loan duration separates these products most clearly. DSCR loans offer 15-30 year terms while hard money maxes out around 24 months.
Qualification criteria differ significantly between the two. DSCR loans require positive rental cash flow ratios. Hard money lenders care about equity and exit strategy instead.
Cost structures vary widely. Hard money carries higher rates but shorter exposure. DSCR loans cost less annually but you pay interest much longer. Your investment plan determines which makes financial sense.
Choose DSCR loans when buying Rialto rental properties to hold long-term. They offer lower rates and stable payments for cash-flowing investments.
Pick hard money for fix-and-flip projects or properties needing major work. Speed and flexibility matter more than interest rates for short holds.
Consider your exit strategy before deciding. If you plan to refinance within a year, hard money works. For steady rental income, DSCR makes more sense. Many investors use both loan types for different projects.
Yes, both DSCR and hard money loans work for Rialto investment properties. Lenders serve San Bernardino County with both products.
DSCR loans typically offer lower rates than hard money. However, rates vary by borrower profile and market conditions for both loan types.
DSCR loans usually require better credit than hard money. Hard money lenders focus more on property value and equity than credit scores.
Hard money loans close faster, often in 7-14 days. DSCR loans take 3-4 weeks typically, similar to conventional mortgages.
Yes, many investors use hard money for purchase and renovation, then refinance to DSCR for long-term rental hold. This is a common strategy.