Question on Hard Money Lender's Terms (newbie here)

2 Replies

Suppose I sign a 12 month term at 8% ...I have been making payments on time, and I am done rehabbing the house and its on the market. What do I do as I enter month 12 and the house hasn't sold? Should I then get a traditional loan or ARM to take the place of the Hard Money loan, or should I contact the HM lender and ask for a 12 month extension? What do people generally do in a case like this?

Thanks!

If there wasn't an option for an extension built in to the original agreement, you can still request one--and it doesn't have to be for 12 months. But you have to weigh the holding costs for the house against the extension fee. If you could drop the price for the house and get a quick sale, you might be out less money than paying an extension fee. 

Originally posted by @Abby Weinstock :

If there wasn't an option for an extension built in to the original agreement, you can still request one--and it doesn't have to be for 12 months. But you have to weigh the holding costs for the house against the extension fee. If you could drop the price for the house and get a quick sale, you might be out less money than paying an extension fee. 

 Sorry for my late response back.  Thank you very much Abby!  This is very helpful!!

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