When you’re approved for a hard money loan, you’re given a set amount of time to repay the loan. This is typically 12 to 24 months. However, if you need more time to repay the loan, you may be able to refinance loan. When you refinancing a hard money loan, you’re taking out a new loan to pay off the old one. The new loan may have different terms, such as a more extended repayment period.
Refinancing a hard money loan can be a good option if you’re having difficulty making payments on the original loan. It can also help you save money if you get a lower interest rate on the new loan.
Before you refinance a hard money loan, make sure you understand the new loan’s terms. Be sure you can afford the monthly payments and that you’re comfortable with the length of the repayment period.
Like most people, you probably don’t think much about refinancing your hard money loan. After all, why would you? You’re already getting excellent terms and low-interest rates, so what’s the point?
Few benefits to refinancing your hard money loan. Here are just a few of them
- A lower interest rate is possible.
If interest rates have decreased since you initially took out your loan, you can get a lower rate by refinancing. Throughout your loan, this could result in significant financial savings for you.
- A longer loan period is available.
If you initially took out a short-term loan, you can get a longer loan term by refinancing. This can give you more time to repay your loan and can save you money on interest.
3. You can get a different loan type.
If you initially took out an adjustable-rate loan, you can get a fixed-rate loan by refinancing. This can protect you from rising interest rates in the future and can make your monthly payments more predictable.
4. You can get cash out.
If you have equity in your home, you can get cash out by refinancing. This can be used for any purpose, such as home repairs or improvements, debt consolidation, or investing in other property.
5. Private mortgage insurance is optional.
If you have private mortgage insurance, you can get rid of it by refinancing. This can save you monthly money and make your loan more affordable.
As you can see, there are many benefits to refinancing your hard money loan. If you’re considering it, talk to your lender to see if it’s right.