As an investor, it’s super important to have quick access to immediate financing. So whether you are looking for a single-family house for fix and flip purposes or an apartment that needs to be repaired before renting, hard money loans will be a perfect solution to do it fast, reliable, and securely.
However, there are cases when the market is down, you have decided that it’d be better to use it for rental purposes than for fix and flip, or you have other unforeseen issues. Subsequently, the only question that arises is what do to, can I refinance a hard money loan? Well, mostly, the answer is yes. But let’s consider the following situations that are mentioned below.
When can you refinance a hard money loan?
One of the most common reasons for refinancing is the term of your current hard money loan has ended. Once you default, your current lender starts charging fees.
You need more money to finish rehab. Some investors are just run out of money to complete renovations. In this case, you can ask for additional financing, so your lender will add additional equity to the property.
There’s another investment opportunity. Let’s imagine that your house (you lent money for) is done, and it’s already on the market but not sold yet. Meanwhile, you see another under-price building, and you know it’d be an excellent investment. Technically, you don’t have any money yet, but you can refinance and kill two birds with one stone.
You purchased a property in cash and now need to renovate it.
You inherited property and need money to renovate it. At first sight, it may not look like refinancing since there’s no loan, but it’s not purchase either, since the ownership does not change, so it’s considered refinancing. Whether you need $50,000 or $500,000, we are ready to lend it to you. We work with all types of clients: from first-time real estate owners to great investors.
How to qualify for refinancing?
First, you will have to collect all necessary documents, have appraisals, and wait for underwriting to do their job correctly.
If your credit score and debt-to-income ratio are in a poor state, try to fix the errors on your credit history and bring your debt-to-income ratio down.
Secondly, make sure you know the terms. For example, if you have to pay pre penalty payment, it’s essential to know the final numbers because you won’t avoid it with refinancing.
LBC Capital is a direct lender that provides hard money loans for all types of property (commercial, construction, fix&flip, land) up to 85% LTV. If you have any questions or want to apply for a hard money loan, please, call our loan advisor at (818) 761-7234 for free assistance.
Check our recent article on where to invest money in 2022 here.
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