| A hard money loan is a type of asset-based loan, | | | | to refinance is made. Seasoning is a term that refers |
| which is usually provided by a private lender, | | | | to the length of time that the property has been |
| oftentimes an individual. Terms vary between lenders, | | | | owned by the seller. Different types of loans have |
| are usually more specific and strict than with | | | | different seasoning requirements, and these will need |
| conventional lenders, and they often come with high | | | | to be fully understood before setting up the deal. |
| interest rates. Typically, a maximum of 70% of the | | | | Many hard money lenders will not issue a loan on a |
| home's market value will be loaned by the hard money | | | | home that will be the borrower's primary residence, so |
| lender. | | | | this will also need to be considered. |
| It is possible to refinance a hard money loan into a | | | | The new value of the home at the time of refinancing |
| more traditional mortgage on a foreclosure or any | | | | will need to be verified, and any repair or fix-up costs |
| other property; however, the borrower will want to fully | | | | will need to be validated through receipts and other |
| research the terms of both the hard money loan and | | | | paperwork. The investor may also need to wait from |
| refinancing loan. He/She will also want to make sure | | | | 6-12 months to refinance depending on seasoning |
| they qualify for the refinancing that they want. | | | | issues. |
| Qualifying for hard money may be easier in certain | | | | To sum up it is possible for a foreclosure property to |
| aspects(often credit score is not considered) than with | | | | be refinanced from a hard money loan originally used |
| typical lending institutions, so this is an important point to | | | | to purchase the home(or other property), but this will |
| consider. | | | | depend on several factors: the terms of the original |
| If the deal is not structured right, there may be | | | | loan, the terms of the new refinanced loan, and |
| seasoning issues with the institution when the decision | | | | whether or not the buyer qualifies for both loans. |