Hard Money Questions

[Raky Patel]

Hi all, I tried searching but could not find the answer. I have two questions that have been on my mind for a while and hopefully someone here can answer them.

1. Is interest from hard money loans tax deductible?
2. Do hard money loans typically affect your debt ratio when looking to purchase other homes with conventional financing or perhaps even a new car? I guess what I am really wondering is if they go on your credit report as outstanding debt (I assume so).

I am opening up my mind to the idea of hard money loans but still am not at the point where I would need to go that route since we still have plenty of conventional mortgages that we should be able to qualify for down the line (only have two properties currently between my wife and I). We will be buying a new primary residence towards the end of the year and renting out our current home. After that big purchase is done I will be free to look at getting other properties. Of concern is that since our w-2s don't reflect 2 years of landlording experience we still will be carrying our other mortgages in our debt ratios so until that income starts to count it may be increasingly difficult to fit another 1 or 2 homes within the debt ratios if we go the conventional route.

Thanks,
Raky