Refinancing a HML

5 Replies

I've been self-employed for less than 2 years. Would I have a problem getting a HML refinanced if I've been self-emplloyed for less than 2 years if I have an income producing property?

I don't have a HML on any property yet. Before I purchase any income producing properties with HM, I wanted to make sure if I couldn't sell them, I could rent them out and refinance them.


IMO... If you plan to refi a HML why not just find financing with better terms and rates... Go to your local bank and talk with them about seting up a portfolio loan. Instead of having to refi in 6mths to a year you can just put yourself in a position to carry a loan that is cheaper and if the bank decides that you need to refi out of there "in house" loan and into a conv. loan they should be willing and able to do it since they wrote the loan in the first place. Call several local or even regional banks and tell them what your finances look like and they will tell you if they can help- That will also give you an idea about your original question if you do decide to use HML's. Good Luck...

I'm a wholesaler. Until I get a contract I can assign, I thought I would buy a house with lots of equity using HM and then either sell it later or rent it and refinance it. My main intent is still to flip to another buyer.

Like my previous post said, I'm self-employed for less than 2 years. My self-employment income is not that great. I won't use HM if I'm going to have little chance of refinancing (in the event I can't sell the house and have to rent it.)

Okay you will still need to talk with a local bank. National lenders have a death grip on their guidelines and it gets more and more difficult to refi conventional loans. If I were you I would just go and talk to a local lender and find out if I would be able to qualify for a loan based on my income, credit, etc. If not then there is your answer...

most hard money lenders don't care if you've been self employed for 2 hours, let alone 2 years. They're making a loan based on the value of the asset. They might check some financials to make sure you can afford to make the payments, then again some HML's like the "loan to own" programs where they thank you for brining the property to their attention, make you the loan at 50% ltv knowing full well you will default, and then they take it back when you do.

As far as refinancing goes, you can go conventional for SFR's, limited of course by your credit rating, income levels, underwriting, etc., or back to hard money, limited most likely by some low ltv (50-60% max), or a local portfolio lender who might give you a higher ltv, with a rate that will be between conventional and hard money, and you'll have to qualify based on income.

It depends on the hard money lender your working with and how long of terms you can get. I would suggest you find out from a lender if you can get qualified for a refinance first. If you can then get a HML to lock up and flip a property. If you dont qualify then you might want to rethink before you lock something up.

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