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

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

Daniel Eden
Member since 2021 · 6 posts · 2 votes

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!

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  • Joshua Haynes
    Aurora, IL · Member since 2019 · 125 posts · 39 votes
    5y

    1. Probably As soon as you get it

    2. I wouldn't see why not

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Joshua Haynes:

    1. Probably As soon as you get it

    2. I wouldn't see why not

    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.

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  • Daniel Eden
    OP
    Member since 2021 · 6 posts · 2 votes
    5y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Joshua Haynes:

    1. Probably As soon as you get it

    2. I wouldn't see why not

    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.



    If there is no 6 month seasoning, and no penalty, than what does the hml get out of it?  Also, if it takes 6 months to rehab and get the house ready, thats 6 months with no cashflow.  How can you expect to pay the interest payments?  And why would a refi lender have a waiting period?

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Daniel Eden:
    Originally posted by @Jay Hinrichs:
    Originally posted by @Joshua Haynes:

    1. Probably As soon as you get it

    2. I wouldn't see why not

    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.



    If there is no 6 month seasoning, and no penalty, than what does the hml get out of it?  Also, if it takes 6 months to rehab and get the house ready, thats 6 months with no cashflow.  How can you expect to pay the interest payments?  And why would a refi lender have a waiting period?

    well if you cant make payments on a vacant house for 6 months its  a totally moot point..  

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    JLH Capital Partners51 Review
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  • Daniel Eden
    OP
    Member since 2021 · 6 posts · 2 votes
    5y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Daniel Eden:
    Originally posted by @Jay Hinrichs:
    Originally posted by @Joshua Haynes:

    1. Probably As soon as you get it

    2. I wouldn't see why not

    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.



    If there is no 6 month seasoning, and no penalty, than what does the hml get out of it?  Also, if it takes 6 months to rehab and get the house ready, thats 6 months with no cashflow.  How can you expect to pay the interest payments?  And why would a refi lender have a waiting period?

    well if you cant make payments on a vacant house for 6 months its  a totally moot point..  

    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.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Daniel Eden:
    Originally posted by @Jay Hinrichs:
    Originally posted by @Daniel Eden:
    Originally posted by @Jay Hinrichs:
    Originally posted by @Joshua Haynes:

    1. Probably As soon as you get it

    2. I wouldn't see why not

    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.



    If there is no 6 month seasoning, and no penalty, than what does the hml get out of it?  Also, if it takes 6 months to rehab and get the house ready, thats 6 months with no cashflow.  How can you expect to pay the interest payments?  And why would a refi lender have a waiting period?

    well if you cant make payments on a vacant house for 6 months its  a totally moot point..  

    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.

    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

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  • George DespotopoulosBusiness Member
    Lender · New York, NY · Member since 2016 · 936 posts · 287 votes
    5y

    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.

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