stupid question time!

[Robby Sanchez]

can you refinance at the end of an interest only loan into another interest only loan?

[Chris Seveney]

Quote from @Robby Sanchez:

can you refinance at the end of an interest only loan into another interest only loan?

 That depends - if its a short term hard money loan possibly, but expect to pay more for it.

I would first ask your current lender if you can extend the loan. We have bought loans like this from existing lender as well as refinanced borrowers into a new IO loan. 

It can be done but each situation is specific and would be underwritten to see the risk and what the exit strategy is. thats the key with shorter term loans - understanding what the borrowers exit is.

[Robby Sanchez]

Quote from @Chris Seveney:

Quote from @Robby Sanchez:

can you refinance at the end of an interest only loan into another interest only loan?

 That depends - if its a short term hard money loan possibly, but expect to pay more for it.

I would first ask your current lender if you can extend the loan. We have bought loans like this from existing lender as well as refinanced borrowers into a new IO loan. 

It can be done but each situation is specific and would be underwritten to see the risk and what the exit strategy is. thats the key with shorter term loans - understanding what the borrowers exit is.

thanks for the answer chris! Its not a question for me specifically. I am learning about financing right now and that question just came into my head. But now that i have you here. what about bridge loans? once the loan comes due for a bridge loan what are your options? Is risk the what matters most when refinancing? or are there just certain loans that cant be refinanced into other ones regardless of risk, DTI, etc.?

[Chris Seveney]

@Robby Sanchez

Bridge loans are short term and if they default or mature in many instances the interest rate doubles - so make sure you have a very solid exit plan

I see many get a bridge loan and realize they don’t have the 25% equity in the deal to refinance to another loan and end up getting wiped or foreclosed on because they never researched what they needed to be at on the back end when they were refinancing.