Loading
in Victorville, CA
Victorville real estate investors have two popular financing paths: DSCR loans and hard money loans. Both are non-QM options that don't rely on traditional W-2 income verification.
DSCR loans focus on rental property income, while hard money loans emphasize the property's value. Understanding the differences helps you choose the right tool for your investment strategy in San Bernardino County.
DSCR loans qualify investors based on rental property income rather than personal income. The debt service coverage ratio compares monthly rent to the mortgage payment.
These loans work well for buy-and-hold investors in Victorville who want longer terms. They typically offer 30-year amortization with competitive rates. Rates vary by borrower profile and market conditions.
DSCR loans don't require tax returns or employment verification. Lenders look at the property's ability to generate sufficient rental income to cover the debt.
Hard money loans are short-term, asset-based financing primarily used for acquisitions and renovations. Lenders focus on the property's current and after-repair value rather than income.
These loans close quickly, often in days instead of weeks. They're ideal for fix-and-flip projects or time-sensitive purchases in Victorville. Rates vary by borrower profile and market conditions.
Hard money loans typically last 6 to 24 months. Investors use them as bridge financing until they refinance or sell the property.
The biggest difference is timeline and purpose. DSCR loans suit long-term rental investors, while hard money fits short-term projects. DSCR loans have lower rates but longer closing times.
Hard money loans close faster but cost more due to their short-term nature. DSCR requires the property to generate rental income, while hard money doesn't. Your investment strategy determines which makes sense.
DSCR loans need appraisals and rent analysis. Hard money lenders move quickly with minimal documentation. Consider your exit strategy before choosing.
Choose DSCR loans if you're buying rental property to hold long-term in Victorville. They offer better rates and terms for cash-flowing properties. You'll need a tenant or strong rental market data.
Pick hard money loans for fix-and-flip projects or quick acquisitions. They work when you need fast funding or the property needs repairs. They're perfect for San Bernardino County properties requiring renovation before rental.
Some investors use both strategically. Start with hard money to acquire and renovate, then refinance into a DSCR loan for long-term holding. Your timeline and exit strategy should guide your choice.
DSCR loans aren't ideal for flips since they're designed for rental income properties. Hard money loans are better suited for renovation projects with quick turnaround timelines.
Hard money loans close much faster, often in 5-10 days. DSCR loans typically take 3-4 weeks due to appraisals, rent analysis, and standard underwriting processes.
Credit requirements vary by lender. DSCR loans generally require higher credit scores (usually 620+). Hard money lenders are more flexible with credit since they focus on property value.
Yes, many investors refinance from hard money into DSCR loans after renovations are complete. This strategy lets you acquire quickly, then secure long-term financing with better rates.
DSCR loans typically have lower rates due to their long-term nature. Hard money loans cost more because of their short terms and quick funding. Rates vary by borrower profile and market conditions.