Refinance

3 Replies

I have a property that I purchased about a year ago and now my hard money loan is about to run out. What type of banks should I consider when refinancing out from under hard money to conventional? Any suggestions would be appreciated.

@Kevin Raye  

I would start with a local credit union, or local bank.  Also depends on what type of property it is, its condition & how many other mortgages you have.  Since you already own it & have history of paying you should be able to do a standard re-fi, or at worst they'll call it a cash out re-fi depending on if your hard money lender placed a lien on the property or not.  Some more details perhaps, and I'm sure you'll get much clearer advise.

JW

@Kevin Raye  

a conventional loan will finance 75% of the appraised value to pay off that loan.  The most important thing you need to do is make sure you either have paid off the hard money loan before the balloon, or sign a written legal document that's notarized extending the term of the loan until you can pay it off.  Even fi you and the hard money lender agree to continue making the regular payments after the initial balloon payment is due, without it in writing prior Fannie and Freddie require this to be an expired note. 

I know this from experience as I once had to have a borrower get 4 note's re-written and recorded, before I could refi him out.  A big expensive headache for the borrower.

Thanks guys for your input. Joe, funny you said that. The hard money lender and I came to an agreement to keep the payments the same. Now I know I need to ask for it in writing. Thanks again!