For many people, their home is their biggest investment and source of savings. When they need to borrow money for major expenses, or to pay off accumulated debts, their home's equity can be used. Most people considering refinancing with a hard money or private money mortgage do so to get cash out for taking care of urgent situations.

Our refinance loans have flexible payment options according to your budget.  Terms are up to 5 years, although we make loans with longer terms when compensating factors exist.  Balloon Payment loans are typical. This means you will need to refinance, sell, or in some way pay back the remaining balance when the loan matures. 

Refinance vs. home equity loan:

Generally, there are two ways to use your home equity to borrow money. You can refinance with a new mortgage  larger than the existing mortgage balance (a cash-out refinance) or get a home equity loan (2nd or 3rd mortgage).

With hard money loans, we recommend a home equity loan over refinancing. The reasons are twofold:

1) You keep a lower interest rate, lower payment first mortgage, usually with no balloon payment. Why payoff a 6% or 8% loan with a 10% to 12% loan? It makes little sense in most situations.

2) You end up paying less in closing costs for a home equity 2nd mortgage because the loan amount is much smaller. Unfortunately, closing costs are substantial for hard money and private money mortgages.  This is the best way to keep them to a minimum. It can mean the difference between paying $20,000 and $5,000 in closing costs. Wouldn't you prefer to have an extra $15,000 in your pocket rather than ours?