Anonymous asked in Business & FinanceRenting & Real Estate · 1 month ago

If someone refinances a hard money loan (HML) into a conventional mortgage and the home’s value goes down, can they still get another HML?

Even though the value of a rental property decreased?

2 Answers

  • 1 month ago
    Favorite Answer

    Hard money lenders don't care so much about losing a loan (they expect it) and don't even care about giving multiple loans, but only if they are sure they'll get there money back one way or the other (ie via foreclosure or you paying off the loan - not talking about loan sharks here).

  • 1 month ago

    Yes and no.  You can often leverage a certain amount of your equity to get another HML, so it depends on how much equity to have when you attain your mortgage and how much you lose when the appraised value decreases.  Or you can attain an HML using what ever other collateral you have, assuming you have enough income to stay within the debt ratio of the lender (to afford both loans).  The fact that your real estate value has decreased will have no effect on your lending qualification assuming your income is not effected.

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