Can you refinance a hard money loan? With New Funding Resources, you bet you can!
Though we focus on helping our borrowers to purchase investment properties in the DMV area, a portion of our business comes from refinancing. We refinance hard money loans issued by other hard money lenders, free-and-clear properties and, when it makes sense, mortgage loan originated by conventional lenders.
Have a hard money loan that needs to be refinanced? We offer both short-term and long-term financing options. Call us today at 240-436-2340 for details or fill out our pre-approval form.
Short-Term Option: Refinancing Your Current Hard Money Loan Into A New Hard Money Loan
Your Current Hard Money Loan is Due
Most of our refinances are refinances of other hard money loans. What are the reasons to refinance one hard money loan into another? The most obvious answer is when your loan is coming due, but your rehab is not yet complete. Once your loan is due, your current lender can declare it to be in default and start charging you a default rate. A default rate on a hard money loan can easily exceed 20% taking a considerable chunk out of your profits. Check your closing documents and especially the Note to find out exactly what rate you will be charged once your loan matures.
You Need More Money to Finish Rehab
Some rehabbers don’t just run out of time to complete your rehab – they run out of money. A new hard money lender might be able to tap into additional equity in the property, refinancing your existing hard money loan and providing the needed funds to finish up the renovations.
You Have Another Business or Investment Opportunity
Another reason why a borrower might want to refinance a hard money loan is to get the funds to capture other business opportunities. For example, consider this scenario. The renovations are completed and the home is on the market but the money is still trapped there until it is sold. A new short-term private loan might be a good way to tap equity. Such loans are often referred to as hard money bridge loans.
You Purchased Property in Cash and Need Money to Rehab It
We also frequently work with borrowers who own a property outright. They might be a well-heeled real estate investor who purchased it in cash or a lucky heir who has inherited a property that is free and clear. They now need a cash infusion to rehab a property to its full potential. Unlike many other private lenders, we have no minimum loan amount, so even if they’re looking for a loan of just $50,000, we can help. In this scenario, we can also roll their loan payments into a loan to help them avoid a future hassle of paying monthly.
Long-Term Option: Refinancing Your Current Hard Money Loan Into a Low- and Fixed-Rate Loan
Once your rehab is complete and, if your strategy is to hold your property in your rental portfolio, it’s time to refinance your hard money loan into a loan that offers longer-term and lower interest rates. Whether you’re refinancing a hard money loan originated by New Funding Resources or by any other private money lender, we can help you lower your costs and generate more rental income. Our long-term refinance loans offer fixed 30-year term rates starting at 5.99% and are based on your rental property’s cash-flow instead of your personal income.
Looking to refinance a hard money loan in Maryland, Washington, DC, & Virginia? Call us today at 240-436-2340 for details.