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When to avoid hard money loans

Hard money loans open doors, and can close doors too. Here are situations where you should avoid these types of loans.

  • You are in a buyers market. If you want to sell the home after fixing it up, and homes aren’t selling well – then you might fail. If your hard money loan is due before you sell it, then you’ll need to refinance, or be foreclosed upon by the hard money lender.
  • You don’t have a refinancing plan in place. Unless you sell your home before the loan comes due, you will have to refinance the hard money loan. You should have a plan in place to refinance the loan, and know what the requirements are to conduct a refinance of the property.
  • Other options are available. Hard money loans are expensive. Make sure you look into other options always.