We get a lot of calls from people asking when to refinance a hard money loan. The answer usually depends on timing and loan terms. Rates are now at historic lows, making it a good time to refinance a hard money loan for rental property. If you got into a hard money loan and you want to get out, it’s best to call our team and discuss your options.
Some investors end up with hard money loans for bad credit scores. If you got into a hard money loan and are looking to refi out, the best options available are for credit scores over 600, but it’s possible to refi into a new/better loan with a low rate even with low credit scores. For investors that need quick cash for a short time frame, hard money refinance may be a good option, with current rates being very low.
The better credit you have, the better terms you’ll get. We are no stranger to high credit utilization. Many investors have high credit utilization, especially when growing their portfolios and especially if subject properties need renovations. Luckily, with a QK mortgage, you can obtain an LLC loan for investment property, allowing you or partner(s) to utilize the higher FICO score.
If you are using hard money loans and/or cash to complete renovations or if you’re interested in learning or discussing more details about our refinance program, call and talk to our team today:
Hard Money Lenders: Pros and Cons
- Hard money loans can have very high-interest rates, with short loan terms that can balloon or become due suddenly.
- We are seeing no doc hard money loans more readily available as the market improves for investors. Having a no doc option cuts qualifying and underwriting timelines drastically. The major benefit is getting a loan closed in less than 30 days.
- Most conforming loans (typically from banks or traditional lenders) require longer seasoning to refinance. Ultimately, investors need better terms to redirect their capital to keep the momentum of growing their portfolio steadily. Our team understands the urgency of redirecting capital.
Private Money Refinance
- private money lenders for residential real estate may be a good alternative to conventional loans.
- private mortgage lenders for bad credit offer slightly higher interest rates, but the advantage is faster approvals and fewer underwriting requirements.
- When refinancing your private money loan, some banks and lenders do not use a new appraisal for the subject property. This should be a red flag for investors who are renovating properties because lenders will not consider the after-repair value (ARV), which is vital for attaining the desired LTV.
What is a hard money loan?
A hard money loan is a private money loan that is based on the property and not the borrower’s personal financial situation. Usually for investors that are looking for quick cash for a short time frame. This is a quick bridge loan or a short term loan for people with low or bad credit. This form of a loan has a high interest due to fast approval.
What do I need to apply for a hard money loan?
What you need to evaluate before you get your loan:
- Outline your goal: Lower payment, purchase a property
- Evaluate your personal finances: Down payment, closing costs, reserves 3. Call and speak with a mortgage professional in order to prequalify for your loan within 24 hours
Can I get a hard money loan with a bad credit score?
Yes, you can get a hard money loan with a bad credit score. First, evaluate your finances, why do you have bad credit, can you change this? The cons of having this low credit score are there will be a higher rate, more closing cost, and higher down payment. Once you have obtained this loan you can change your interest rate and loan as soon as you have a higher credit score.
Be debt conscious:
Many investors have high debt loads, which shouldn’t stop you from qualifying for your loan. With QK mortgage you can quickly determine your best options for your investment loan.
When is the right time for refinancing out of my hard money loan?
Once you are nearing the end of your hard money loan term you should have finished your renovations & you should give yourself time to look for the right company to refinance your loan. Call QK Mortgage to refinance your hard money loan.
When should I refinance my loan?
You should refinance your hard money loan as soon as you have a higher credit score or better finances. The better credit you have the better loan you’re going to receive. As a general rule, it’s usually possible to refinance once the value of the property increases.
Private money refinance
When refinancing your private money loan make sure your banks and lenders use a new appraisal for the property. If they don’t use a new appraisal this is a red flag for investors looking to renovate their space. Make sure your investor is looking at the after-repair value.
Tips for getting a hard money loan:
Make sure when you’re going into a hard money loan you want to partner with an alternative lender, who is a true financial partner. These partners help confirm your reliable cash-flow. Call QK mortgage, your hard money lender to see if you qualify.
Underwriting your loan:
The underwriting process is program-specific, you must outline your goal, and talk to a mortgage professional. QK Mortgage will help you go over your finances and discover what program is best for you.
At QK Mortgage we have a simple, dependable, and affordable loan process. We provide our clients with a clear and easy-to-follow process to obtain the best loan for them. With our help, you can obtain the best loan for you even with the lowest credit scores.
At QK, we pride ourselves on our fast, simple, and dependable loan process which enables investors to quickly grow their real estate portfolios. Our team helps investors to refinance properties out of hard money loans.
Partner with an alternative lender who isn’t just a lender, but a true financial partner. At QK, we can help you run scenarios to confirm adequate income and cash-flow on the subject property.
Call and talk to our team today if you’re interested in discussing more details about our refinance program: