Hard Money... What will my money costs be?

Question

Using Hard Money... When can I refinance?

For example:

I buy a home for 100,000 cash using hard money. I do a light rehab using my own money. I find a tenant and have the home reappraised. How long can I expect to be paying interest on the hard money loan before getting a conventional loan? I understand it will be differnent for different loan applicants, I just want to have an estimate to use for running numbers and evaluating potentional investments. In short, how do I accurately estimate money costs?

Wayne Brooks · Answer

You could refi right away typically for the Same loan amount.....”rate and term refi”, assuming the amount meets the ltv (75% or so) based on appraisal.  A minimum of 6 months if you wanted to refi for more, based on appraisal.

Ricky Cassidy · Answer

Wayne/Caleb,

Thanks for the insite!

Ricky Cassidy · Answer

Michele,

Thank you for your reply, this is a hypothetical situation. My goal was get some information on the seasoning lengths necessary to refinance. (or if there is potential for immediate refi after renovation).

You say other routes, which are you referring too?  (private lender, FHA, USDA, VA)?

I would love to hear alternates.

Michele B. · Answer

You don't  have to do conventional loans there are other types out there that is not hard money.   I mean hard money is fine when you need it and I get that.  I was asking why was he going that route when there are other routes.

Caleb Jordan · Answer

If the house is distressed enough conventional won't work, if your job situation if complicated conventional is harder or if you need power of cash offer and fast close.

Michele B. · Answer

If you are paying rehab out of pocket why do you need the hard money just get a regular loan?  I am confused.

Caleb Jordan · Answer

Rates could be between 8 and 14 percent , probably 2 to 3 orgination points.  It really depends on your experience, ltv, credit etc. If it is only purchase I know of one HML that does 7.75 rate and 1.75 origination points at 25% down. To refi into conventional will be at least 6 months because of seasoning. Some HML offer loans for rentals in the 7 percent range, these usually don't require seasoning or personal income docs.

Hard Money... What will my money costs be?

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