What is a Cash Out Refinance Hard Money Loan?
Cash out and refinance loans on residential, multi-family and mixed use investment properties are a common loan scenario for investors looking to capitalize on equity from an existing property. These funds can be used for a variety of purposes including purchasing another property, paying down debts, and even covering the costs of renovations or upgrades.
A cash out and refinance hard money loan through a hard money lender like Asset Based Lending replaces the first mortgage on a property and takes first position. If the property is owned free and clear, the cash out loan amount may be as much as 45% of the as-is value of the property. If there is a mortgage on the property, the loan amount is still based on the property’s value, but the proceeds would have to be enough to take out the existing mortgage and still provide the additional funds desired.
For a standard cash out and refinance, the loan amount is calculated by looking at the value of the property in its current condition. If the property was purchased recently, and the purpose of the loan is to fund renovations needed to then sell the property, ABL may develop a hybrid cash out and rehabilitation loan similar to our fix and flip loan product.
What are the Benefits of a Hard Money Refinance & Cash Out Loan?
With traditional lenders limited to strict underwriting parameters, it may be hard for an investor with no proof of income or bad credit to get funded. Asset Based Lending can help!
Our underwriting guidelines focus on equity over borrower financials, giving our clients the liquidity needed for their individual demands. With interest rates from 10% to 12%, lower than most credit card rates, our hard money cash out & refinance program is a great option for the real estate investor in need.
Any seasoned investor knows just how crucial a quick close can be. At Asset Based Lending, we have closed loans in as little as 48 hours and have an average close time of ten days, unlike a conventional mortgage loan which takes a minimum of 60 days to close.
How Do I Get A Hard Money Loan For Cash Out And Refinance?
The process of securing a hard money cash out & refinance loan is much different than that of a traditional refinance. Unlike a conventional loan, which requires a significant amount of paperwork, a hard money cash out & refinance requires minimal documentation. Once you have completed the loan application, the loan officer and underwriter will review the deal with you and order an appraisal if the deal fits. From that point, ABL issues a written term sheet that outlines all the loan’s details so there are never any hidden fees. The loan then moves to processing where the few required documents are collected, and ultimately the loan is closed by an attorney.
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