What to do when you can’t pay back your hard money loan!

June

19

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What to do when you can't pay back your hard money loan!

The market is changing quickly, and not in a good way for many flippers. While buying is getting easier in the shifting market, Jacksonville price declines and mortgage rate hikes are making the exit strategy harder. Whether you are having trouble refinancing or finishing your project, here's what to do when you your hard money loan is due, but you don't have the money!

hard money lender

NEGOTIATE WITH YOUR PRIVATE MONEY LENDER

The lenders also know the market is changing, and you are not likely to be the only one with this problem. Remember, your hard money lender really doesn't really want to foreclose, so it's worthwhile to attempt to talk to them first. They may give you an extension, or alter the terms of your loan. It's always worth a shot!

REFINANCE

If you are planning on keeping the property and are having trouble because you don't have enough equity or the new rates are too high, you may want to call around. There are many lenders with different mortgage and refinance products. A solid mortgage broker is your best bet, as they will have access to more products than a single bank. 

sell in preforeclosure

SELL THE PROPERty

If your private money lender won't budge, and you've exhausted your refinance options, it's time to liquidate to avoid foreclosure. Even if your renovation isn't complete, get the property listed as-is. The fees associated with a loan default are high, and they accrue quickly. Time is not your friend, and especially not in a declining market. Get the house listed, priced aggressively, and get it SOLD!

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Last Updated on June 19, 2023 by Minna Reid

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June 19, 2023

What to do when you can’t pay back your hard money loan!

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