Refinancing after building a home using a Hard Money Loan

[Sophia Berry]

Hello,

I wanted to build a home using a hard money loan, however instead of selling the home to pay off the hard money loan, I wanted to just refinance with a conventional lender and pay off the hard money loan. Will there be any road blocks on doing so?  For example seasonal requirements or you will have to stay in the home or rent it out for a year before you can refinance.  Please note I have spoken to the Hard money lender and they indicated that as long as they get paid back, they really don't care what you do.

[Randy Rodenhouse]

The simple answer is that most hard money loans do not have a prepayment penalty and you can pay them off at anytime without issues.  However, make sure you read your note/mortgage carefully to avoid any possble prepayment penalties. If you are not getting cash out refi you should be fine as @Joseph Escamilla mentioned.