Flipper · Round Lake, IL · Member since 2015 · 8 posts · 1 vote
The property that I rehabbed hasn't sold yet in which I had to extend the maturity date with my Hard Money Lender. The problem is that I have to pay an additional 1.5% monthly on top of the annual interest payment which costs a lot to pay for an extension of a loan. I know that banks will not refinance fix and flip loans. Are there any other types of loans or companies that I can refinance with? Your help is greatly appreciated.
It depends on the time period you purchased the home and how much your loan amount is. Most lenders will not refinance this property because you are looking to sell it the instant you have a buyer and they need you to stay in the loan for at least 3-6 months depending on the bank/lender's overlays for conventional refinancing so basically you're looking at hard money options and most lenders charge anywhere from 4-9% for the origination of the new loan. So you still have 3 months to sell it before a replacement loan would make sense. If you were planning to keep it and use it as a rental, you have options though. The hard money loans are designed to create the urgency to not hold the loan for an extended period of time because there is no secondary market they are selling to, there are some companies out there that could get you out of it, but costs of refinance probably will exceed the benefit for paying the 1.5% per month. Its a matter of how long you think it'll take to sell.
@Jay Roque Closing costs on a refinance will cost you also and you will lose equity. I agree drop the price and move on to the next deal. How long have you been on the market?
@Jay Roque Closing costs on a refinance will cost you also and you will lose equity. I agree drop the price and move on to the next deal. How long have you been on the market?
@Jay Roque Closing costs on a refinance will cost you also and you will lose equity. I agree drop the price and move on to the next deal. How long have you been on the market?
@Jay Roque Closing costs on a refinance will cost you also and you will lose equity. I agree drop the price and move on to the next deal. How long have you been on the market?
Even though a quick google search revealed an area where homes go for as little as $50k or $80k, I don't think $500 is going to move the needle much.
The property that I rehabbed hasn't sold yet in which I had to extend the maturity date with my Hard Money Lender. The problem is that I have to pay an additional 1.5% monthly on top of the annual interest payment which costs a lot to pay for an extension of a loan. I know that banks will not refinance fix and flip loans. Are there any other types of loans or companies that I can refinance with? Your help is greatly appreciated.
I know the thread is about getting rid of this property but to the contrary of what you said regarding lenders won't refinance it, its not that lenders or brokers wont want to lend on it persay but rather they dont want a charge back if you intend to sell the property asap.
If you were to "keep," it as a rental and refinance to rent you could technically refinance it.
However, out of respect to your lender or broker you may want to keep the loan till the early payoff period or EPO is past so your lender does not get charged back unless you want to burn the bridges so to speak.
