Paying off a hard/ private money lender?

[Bridget Huebner]

I was wondering if anybody, in the most Real Estate for Dummies way possible, could walk me through the process of paying off a private/ hard money loan using a conventional mortgage?

(Forgive me for this next part, I'm trying to understand this process and have not been able to find the answers I need!)

For clarification, I buy a house that does not qualify for a regular ole 30-year mortgage right? Let's say it has a foundation issue. I have a private party pay for the house. Before my balloon payment after a year or so, this property would now qualify for a conventional mortgage! Yay! Can I get a mortgage on this place to pay off the lender and then keep the property for myself as a rental?

Someone, anyone, please hold my hand and walk me through this process and tell me anything I need to know. Thank you!

[Cris Normandt]

HI Bridget, Matt is absolutely correct. You have to figure out the seasoning period needed in order to get out of the HML. If you get into a loan that has 10-12% interest and find out you have to wait longer than anticipated to refi out you are burning cash like crazy. Make sure to do your due diligence and get your financing for the refi in order.