Investor · NH · Member since 2020 · 175 posts · 75 votes
I've heard a few things about a six month time period before you can refinance. I am not sure if this is just for refinancing a conventional 30 year loan into another one, or if it applies to refinancing a private/hard money loan.
I'm thinking of this in terms of a BRRRR. If I have a hard money loan and can finish the rehab within a month, do I have to wait 6 months to refinance? Or can I refinance as soon as I am done my rehab?
@Cole Britting The seasoning requirement is not a steadfast rule for private lenders/HMLs. It is a good guideline to have either improved on the property with documented proof. In your case, refi should not be an issue. keep in mind if you want anything long-term, most lenders will look at a DSCR. If your property is not stabilized and cash-flowing you may not be able to get anything longer than a bridge loan as was mentioned by @John Morgan.
Most HML can roll a rehab loan into a year long bridge loan for seasoning. It will be higher rates but for only a year. THen go to a local bank for best rates.
@Cole Britting The seasoning requirement is not a steadfast rule for private lenders/HMLs. It is a good guideline to have either improved on the property with documented proof. In your case, refi should not be an issue. keep in mind if you want anything long-term, most lenders will look at a DSCR. If your property is not stabilized and cash-flowing you may not be able to get anything longer than a bridge loan as was mentioned by @John Morgan.
I recently purchased a property using financing from a hard money lender. This was for a BRRRR deal. The renovations were completed this week and the hard money lender is no longer offering long-term loans. I've spoken with numerous hard money lenders at this point and it seems like all of them have suspended their refinance programs.
@Ryan Holland - I think you will see an uptick on lenders offering long term options this week.The biggest adjustment today is the rate those loans are offered at. I would suggest you go into a refi or extension if possible with no PPP so you can refi at any point. A lot of my borrowers are looking for long term stuff however the rates that make sense today prevent some deals from hitting the DSCR requirement so I encourage them to refi into another bridge loan. Just seems like the right move today instead of locking in a long term w/higher rate and a prepayment clause.