Cost to Refinance out of Hard $ loan?

Financing, Hard Money Lenders, Private Money
1

When you refinance out from a hard money loan, you are basically getting a new loan. That means there will be loan origination fee’s and other costs to create this loan. I know hard money lenders usually do not provide the permanent take out financing, and I havnt been able to talk with a loan officer yet to see the refinance cost. So I figured I would post here to get a good estimate.

Assuming the above is correct, I believe a good estimate of the cost to refinance the house is usually in the $2,500 range. Is that a good estimate? I am in the DFW area in TX.

2

That’s a reasonable estimate:

600 Bank processing/underwriting/admin fees
400 Appraisal/credit report
400-500 Title search/closing fee
? Title insurance - depends on amount and if you get lenders or owners policy
1.75% of loan amount on conventional investor loans - this can be paid up front or built in via a higher rate
100-500 Misc like recording fees, floor certification, courier fees, stick-it-to-you fees, etc.

3

Hard money lenders are not like the banks the hard money lenders have different rules on lending funds. It is always the best to go with transitional funding.

4

Thanks d1beard. Also what do you think would be a reasonable estimate on how long it takes, from date of application, until your able to refinance out from your hard money loan into a conventional financing?

5

brokers use to tell me they could get the conventional refinance done in 30 days,but unfortunately what I’m seeing right now is actually closer to 60 days,the lenders put the person buying as a higher priority, refinances go to the end of the line

6

Rule of thumb, use 5-7% of the new loan amount to cover all closing costs on the refi including prepaids. There are several factors that derive the fees involved.

Chris Jameson

7

This is very true. Another option is to use lines of credit (HELOCs) to finance properties, or even home equity loans. Banks and credit unions offer these with low or no closing costs. You could even use credit cards, if you have some with high enough limits. Imagine financing a home at 3% for a year using credit cards… Just be sure to pay the homes off as quickly as possible.