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in Lathrop, CA
Lathrop investors face a choice between DSCR loans for rental income and hard money for fast acquisitions. Both skip W-2 verification, but they serve different phases of the investment cycle.
DSCR loans work for stabilized rentals generating cash flow. Hard money fuels fix-and-flip projects or time-sensitive purchases before traditional financing kicks in.
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 approved.
Rates run 1-2% above conventional, with 15-30 year terms. You need 20-25% down and a DSCR ratio above 1.0 for most lenders, higher for better pricing.
Hard money lenders fund based on property value, not your financials. They close in 7-14 days, which matters when you're competing with cash buyers in Lathrop.
Expect 9-14% rates and points upfront, usually 2-5 points. Terms run 6-24 months because these loans finance acquisition and renovation, not long-term holds.
Cost separates these loans immediately. DSCR rates sit in the 7-9% range while hard money starts at 9% and climbs from there, plus substantial points at closing.
Timeline matters more than rate for some deals. DSCR takes 30-45 days to close, hard money closes in under two weeks. Use hard money when speed trumps cost.
Choose DSCR if you're buying a rental property to hold long-term in Lathrop. The lower rate and long term make monthly payments manageable for cash flow properties.
Pick hard money for fix-and-flip projects or when you need to close fast on a foreclosure or auction property. Plan your exit strategy before closing—most investors refinance into DSCR loans after renovations stabilize the property.
Yes, but it's expensive for long-term holds. Most investors use hard money to acquire properties quickly, then refinance into a DSCR loan once tenants are in place and rent is established.
Hard money approves almost anyone since it's asset-based. DSCR requires decent credit (usually 620+) and sufficient rental income to cover the mortgage payment.
Neither requires an LLC, but many investors use one for liability protection. Both loan types can close in personal or entity names without affecting approval odds.
DSCR lenders typically go to 75-80% LTV. Hard money ranges from 65-75% of purchase price or after-repair value, whichever is lower.
Most hard money loans include prepayment penalties or minimum interest periods. Read the terms carefully—some charge interest for the full first 6 months regardless of payoff timing.