Hard Money Loan and Refinancing

[Tim Morales]

Hi,

If you take out a hard money loan using a property as the collateral for that hard money loan, in order to pay off that property's mortgage, does the hard money loan act as another mortgage against the house once the mortgage is paid off?  I'm trying to figure out if the hard money loan would act as a liability against the house if I was to try to refinance the house after the mortgage was paid off with the hard money loan.  And then use the refinance to pay off the hard money loan.

Any feedback is greatly appreciated.

[Jonathan Holmes]

If I am following this you have a current mortgage that you wish to pay of with a hard money loan before securing a new mortgage to pay off the hard money loan. While I can’t really imagine a scenario that this situation would occur the answer would be it depends on you HML lender. They would legally be able to record a lien with the county which would then show up like any other mortgage. They would not have to do so but I can’t imagine why they wouldn’t as this would be the only way for them to actually secure the loan.