What to Expect from a Cash-Out Refinance with Hard Money Loans

A cash-out refinance with a hard money loan is a powerful strategy for real estate investors looking to unlock the equity in their properties. Whether you need capital for a new investment, renovations, or debt consolidation, cash-out refinancing allows you to leverage your existing property to access quick funding. Unlike traditional loans, hard money cash-out refinancing focuses primarily on the property’s value rather than the borrower’s credit score or income, making it a preferred option for investors needing fast and flexible financing.

What Is a Cash-Out Refinance?

A cash-out refinance is a loan that allows property owners to refinance their existing mortgage while withdrawing a portion of their home equity in cash. The new loan replaces the current loan with a higher balance, allowing investors to use the difference for property improvements, business expansion, or additional real estate acquisitions.

With a hard money loan, a cash-out refinance is based on the asset’s value rather than the borrower’s financial history. These loans are ideal for investors who need quick approvals and short-term funding without the delays and strict underwriting of traditional lenders.

How Does Cash-Out Refinancing with a Hard Money Loan Work?

1. Property Valuation – The lender assesses the property’s current market value and its potential after repairs (ARV).
2. Loan Approval – Unlike conventional lenders, hard money lenders focus on the property’s value rather than the borrower’s credit score or debt-to-income ratio.
3. New Loan Issued – The new refinance loan replaces the old mortgage, and the borrower receives a lump sum of cash based on the available home equity.
4. Fund Allocation – Investors can use the cash for real estate purchases, renovations, business growth, or debt consolidation, depending on their financial goals.

Benefits of a Cash-Out Refinance with Hard Money Loans

1. Fast Access to Cash – Traditional loans can take weeks or months to process, whereas hard money cash-out refinancing can be approved and funded within days.
2. Flexible Lending Requirements – Since hard money loans are asset-based, they are ideal for real estate investors with lower credit scores or non-traditional income sources.
3. Leverage Equity for New Investments – Unlocking the equity in your property allows you to purchase additional investment properties, renovate for higher returns, or expand your rental portfolio.
4. Short-Term Financing Solution – Many real estate investors use cash-out refinancing with hard money as a bridge loan while waiting for permanent financing or selling a property.
5. Predictable Monthly Payments – Cash-out refi loans are structured with fixed or interest-only monthly payments, helping investors manage cash flow effectively.

When Should You Consider a Cash-Out Refinance with Hard Money?

A cash-out refinance with a hard money lender is ideal when:

• You need quick funding to purchase new investment properties or renovate an existing one.
• You want to avoid the lengthy approval process of traditional home equity loans or bank mortgages.
• Your credit history doesn’t meet bank requirements, but you have a strong real estate investment plan.
• You need cash flow for business expansion, debt consolidation, or other financial goals.

How Much Can You Borrow with a Hard Money Cash-Out Refinance?

Most hard money lenders allow investors to borrow up to 70-75% of the property’s current value or after-repair value (ARV).

For example, if a property is worth $500,000 and has an outstanding loan balance of $200,000, an investor could refinance up to $350,000, pulling out $150,000 in cash for reinvestment or other uses.

Your monthly payment and interest rate will depend on the loan amount, term length, and lender policies.

Comparing Hard Money Cash-Out Refinancing vs. Traditional Loans

Feature	Hard Money Cash-Out Refinance	Traditional Cash-Out Refinance
Approval Time	3-7 days	30-60 days
Loan-to-Value (LTV)	Up to 75%	Up to 85%
Credit Score Requirement	Low/None	620+
Income Verification	Minimal	Strict
Monthly Payment	Interest-only options	Fixed principal & interest
Home Equity Loan Alternative	Yes	Requires bank approval

While traditional lenders may offer lower rates, they require higher credit scores, income verification, and longer approval times. Hard money cash-out refinancing is ideal for investors needing fast access to equity with flexible terms.

Potential Risks of a Hard Money Cash-Out Refinance

1. Higher Interest Rates – Hard money loans typically have higher refinance rates than bank loans due to their short-term nature and fast approval process.
2. Shorter Loan Terms – Unlike traditional cash-out refinance loans that last 15-30 years, hard money loans typically have 6-24 month terms.
3. Loan-to-Value (LTV) Limits – Hard money lenders cap LTV at 70-75%, compared to banks that may allow 80-90% financing for cash-out refinancing.
4. Closing Costs – Closing costs on hard money refinance loans may be higher than conventional mortgages due to the speed and flexibility of financing.

Is a Cash-Out Refinance with a Hard Money Loan Right for You?

A cash-out refi with a hard money loan is best suited for real estate investors who:

• Have equity in an investment property and need quick access to cash
• Are looking for flexible financing without the restrictions of traditional banks
• Need short-term funding while waiting for permanent financing or property sale
• Want to reinvest in real estate and grow their portfolio

At One West Hard Money, we specialize in fast and flexible cash-out refinancing for real estate investors. Whether you need funds for a fix-and-flip project, property upgrades, or expanding your rental portfolio, our loan experts are ready to help.

Contact us today to learn more about our cash-out refinance loan options. Call us at (314) 887-5834 or email loans@onewesthardmoney.com to get started.