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in Saratoga, CA
Saratoga attracts serious real estate investors. Properties here command premium prices, so picking the right financing structure matters.
DSCR and hard money are both non-QM tools. They solve different problems for different investor profiles.
DSCR loans qualify you based on the rental property's income — not your W-2 or tax returns. Lenders look at one number: does rent cover the mortgage?
Most lenders want a DSCR of 1.0 or higher. A 1.25 ratio gets you better pricing. These are 30-year loans built for long-term holds.
They close slower than hard money but carry lower rates. For a stabilized Saratoga rental, DSCR is usually the smarter permanent financing choice.
Hard money is asset-based and fast. Lenders care about the property's value — not your income, not your credit score.
Expect 6- to 24-month terms with higher rates. These loans fund quickly, sometimes in days. That speed has real value in a competitive Silicon Valley market.
Hard money fits fix-and-flip projects or bridge situations. It is not designed for long-term holds — the cost structure works against you if you try.
Local decision guide
Use this comparison to weigh DSCR Loans and Hard Money Loans through local payment fit, eligibility, documentation, and timing before choosing a path in Saratoga.
Saratoga attracts serious real estate investors. Properties here command premium prices, so picking the right financing structure matters.
DSCR and hard money are both non-QM tools. They solve different problems for different investor profiles.
DSCR loans qualify you based on the rental property's income — not your W-2 or tax returns. Lenders look at one number: does rent cover the mortgage?
Rate is the biggest gap. DSCR loans price closer to conventional investment rates. Hard money rates run significantly higher — that spread eats into flip margins.
Term length separates them too. DSCR gives you 30 years to build equity. Hard money forces a decision: sell, refi, or pay a penalty.
DSCR requires a stabilized, rentable property. Hard money lends on a value that may not exist yet — like a distressed property mid-renovation.
Buying a Saratoga rental and holding it? DSCR is almost always the right call. Lower rate, longer term, and no income docs to fight through.
Chasing a distressed Saratoga property to renovate and sell? Hard money gets you in fast. Just model the carry costs honestly before you commit.
Some investors use both in sequence. Hard money to acquire and renovate, then a DSCR refi once the property is leased and stabilized.
Most lenders want a lease in place or a market rent appraisal. A vacant property with no rent history makes DSCR qualification harder.
Many hard money lenders fund in 5–10 business days. Speed depends on clear title and a clean appraisal or BPO.
Most DSCR lenders want at least a 620. Better scores get better rates — 700+ puts you in the best pricing tiers.
You need to sell, refinance, or negotiate an extension. Failing to exit on time can trigger default and penalty rates.
Yes — this is a common strategy. Once the property is stabilized and leased, a DSCR refi replaces the hard money at a lower rate.
Hard money LTVs vary widely by lender and project. DSCR loans typically allow up to 80% LTV on a purchase.