Transitioning From Hard Money to Conventional

[Didier Bizimungu]

Hi all! 

Newbie question here. Once I've secured a hard money loan and used it to buy/rehab a home, how do I present my current situation to a traditional lender when acquiring a conventional loan on the property? 

Do I present the property as currently having a hard money loan on it with attached details? Or do I present it as owned by me? Also, how does a bridge loan differ in this scenario? 

Appreciate any insights here. My approach is buy & hold/rent.

Thank you,

Didier B.

[Stephanie P.]

Originally posted by @Didier Bizimungu:

Hi all! 

Newbie question here. Once I've secured a hard money loan and used it to buy/rehab a home, how do I present my current situation to a traditional lender when acquiring a conventional loan on the property? 

Do I present the property as currently having a hard money loan on it with attached details? Or do I present it as owned by me? Also, how does a bridge loan differ in this scenario? 

Appreciate any insights here. My approach is buy & hold/rent.

Thank you,

Didier B.

The truth is the best answer, always.  

The hard money loan has a lien on title so the conventional or DSCR lender, when they do their title search, is going to see the lien. They're going to then ask you for a copy of the note, the mortgage history, the settlement sheet from when you bought it, lease for your new tenant and a list of improvements. Have all of that ready to go before they ask. Also, make sure you make your payments on time and make them trackable (Venmo or check are fine, but NO CASH) so you don't blow your refinance; especially if the renovation or stabilization of the property goes long and you run into a situation where there's a balloon or you're in default. Get the hard money lender to do a modification of the loan, IN WRITING, so there is no question that you're not in default.

Welcome to BP

Stephanie