Refi after Private or HML

If I use private, or Hard Money, to purchase a property, and rehab it, can I refinance it to pull out the equity? Or will I have to get an initial mortgage, which will typically cover only purchase price, and then do a refi to pull out equity?


Yes you can refi out of the private or hard money loan but with under 6months seasoning its more difficult to do. It can be done though up to 85% maybe 90%ltv with good credit.

Mike, Zachary is correct. A HML or private loan is classified as a mortgage. You will probably need to provide a “mortgage” history to the new lender as Private and HML’s don’t report to the credit bureau.

However, you will be doing a refinance to pay them off and the refinance can be cash out. It will all depend on the LTV.

Cash out with no seasoning is what your up against.

Most conforming lenders dont have an issue with this if your full doc and under 85% or stated with an ltv no higher than 75%.

If you cant qualify for a conforming or need a higher ltv then you may need to use a portfolio or Alt-A lender. There are a limited amount of lenders that offer no seasoning and each of their guidelines are different so make sure your consultant is asking all the right questions before submitting your loan. Most of these will need at least a 620 score.

Any lower than that, or if you cant qualify for those loans, then you’ll need subrime lenders and all of these have 6-12 month requirements.

Thanks to all for your replies!


I always recommend that my investors save receipts and make sure their rehab project is documented - well. For cash out re-fi, I would recommend contacting Flagstar. Most lenders just want to make sure you did not begin with an inflated appraised amount.

Lisa K. Johnson
Mortgage Planner
Indianapolis, IN