How long before you can refinance if borrowing from a hard money?

Question

Hi Everyone,

Quick couple of questions:

1. If you borrow hard money, how soon can you refinance?

2. Does the answer to the question above apply to a personal home loan?

Thank you!

George Despotopoulos · Answer

Hey @Daniel Eden you should work w/ a HML that provides you with a closing cost estimate upfront and use that to compare @ settlement. You should also seek out one that does not charge a prepayment penalty, especially if it's a 6-12 month term. If there's no prepayment penalty, then you don't have to worry about how quickly you can refinance out of it. There are HML that also offer 30 year term loans. Many will go up to 80% LTV on rate/term and have no seasoning requirements and there are also lenders than can do a 75% LTV cash-out @ the 3 month mark.

Jay Hinrichs · Answer

HML makes points..  AND interest.. so thats what thye make plus junk fees  probably 4 to 6k up front for the loan plus interest.

as a new borrower highly unlikly they will do no payments though

Daniel Eden · Answer

I get what you are saying.  It just seems to me that whenever they do one of these webinars they make it seem like you can buy a house through an hml, rehab it, rent it out, and then refi it all before any payments to the hml are due.  Also, I'm just trying to understand what the hml gets out of it if you refi it right away, or within a few months.

Jay Hinrichs · Answer

couple things first the HML may have a pre pay penalty not always but many do.

its not the HML that dictates how soon its the take out or refi lender..  there normally is a 6 month seasoning but I hear tell there are some lenders that dont require seasoning.. maybe those are local banks or credit unions or lenders that are not doing fannie.

safe to say by the time you buy it rehab it etc the 6 months goes pretty quick and should not be an issue.

Joshua Haynes · Answer

1. Probably As soon as you get it

2. I wouldn't see why not