Hard Money Refinance FAQs

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.

Qualification is much simpler than a bank loan, but it requires some “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 (for example selling the property or refinancing into a traditional loan later).
• Basic Financials: Credit is less important, but lenders may still check for recent bankruptcies or major red flags.

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

• Identity Documents: Driver's license or passport.
• Property Deed: Proof that you own the property.
• Current Mortgage Statement: Shows how much you currently owe.
• Title Insurance: Ensures there are no hidden liens.
• Entity Documents: Required if the property is owned through an LLC or corporation.

Hard money lenders typically follow a Loan-to-Value (LTV) ratio of 65% to 75%. This means the loan amount cannot exceed that percentage of the property's value.

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

• Single-family homes (usually non-owner occupied)
• Multi-family units such as duplexes and apartments
• Commercial buildings including offices, retail, and industrial properties
• Fix-and-flip or distressed properties needing repair
• Land (typically with lower LTV limits)

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

This is one of the biggest advantages of hard money refinancing. While traditional bank loans may take 45 to 60 days to close, hard money loans typically close within 7 to 14 days.

In some cases, if documents are ready and the property title is clear, funding can happen in as little as 3 to 5 business days.