Hard Money Refinance

What is a Hard Money Refinance?

A hard money refinance is a short-term, asset-based loan provided by private individuals or companies rather than traditional banks. Unlike a standard mortgage that focuses on your credit score and income, a hard money lender focuses primarily on the value of the property (the collateral).

People typically use this to quickly access equity or to pay off an existing loan when they don't qualify for traditional financing.

How do I Qualify for a Hard Money Refinance?

Qualification is much simpler than a bank loan, but it requires "skin in the game."

• Property Value: The property must have enough value to cover the loan.
• Equity: You generally need significant equity (usually 30% or more).
• Exit Strategy: You must show the lender how you plan to pay them back (e.g., selling the property or eventually refinancing into a traditional loan).
• Basic Financials: While credit is less important, lenders may still check for recent bankruptcies or major red flags.

What Are the Pros and Cons of a Hard Money Refinance?

What Are the Steps to Getting a Hard Money Refinance?

1. Find a Lender: Research private lenders who specialize in your property type.
2. Initial Application: Provide the property address and the amount you want to borrow.
3. Property Evaluation: The lender will perform an appraisal or a "BPO" (Broker Price Opinion) to verify value.
4. Review Terms: The lender provides a term sheet outlining the rate, fees, and duration.
5. Closing: Sign the documents with a notary or at a title company.

What Documents Do I Need for a Hard Money Refinance?

Because these are asset-based, the list is shorter than a bank's:

• Identity Docs: Driver's license or passport.
• Property Deed: Proof that you own the property.
• Current Mortgage Statement: To show how much you currently owe.
• Title Insurance: To ensure there are no hidden liens.
• Entity Docs: If you own the property through an LLC or Corporation.

How Much Equity Do I Have to Have in My Home?

For a hard money refinance, lenders typically follow a Loan-to-Value (LTV) ratio of 65% to 75%.

Example: If your home is worth $400,000, a lender may offer a maximum loan of $280,000 ($400,000 x 70%). This means you must have at least 30% equity remaining in the home after the loan is issued.

What Types of Properties Will Qualify?

Hard money lenders are very flexible with property types, including:

• Single-Family Homes (usually non-owner occupied).
• Multi-Family Units (apartments/duplexes).
• Commercial Buildings (offices, retail, industrial).
• Fix-and-Flips (distressed properties in need of repair).
• Land (though at much lower LTVs).

Note: Most hard money lenders prefer "non-owner occupied" investment properties due to federal regulations.

How Long Does it Typically Take to Close?

This is the biggest "pro" of hard money. While a bank might take 45-60 days, a hard money refinance typically takes 7 to 14 days. In some cases, if you have all your documents ready and a clear title, it can be done in as little as 3 to 5 business days.

Ready to Explore Your Options?

Contact AHL Hard Money Network today to speak with an experienced lending specialist who can walk you through the process and help you determine if a hard money refinance is the right move for your investment. Whether you're looking to access equity quickly, pay off an existing loan, or secure funding that traditional banks won't provide, AHL Hard Money Network offers fast approvals, flexible terms, and a straightforward process built for real estate investors.