Paying off a hard money loan is the goal of every property owner, yet it can require several steps by the borrower to prevent problems. In many cases, a hard money loan was obtained to pay off a private mortgage. Some private lenders may have problems offering a clear payoff amount which allows the borrower to obtain a new loan. Shop Commercial Mortgage makes this process simple by carefully tracking your loan details, and we will work with private lenders when needed to clarify a payoff amount.
Other hard money financing details you should review with us prior to your loan include:
- Details on any loan payoff fee and when it is paid.
- Subordination agreements and fees when you are replacing your first mortgage with financing from Shop Commercial Mortgage and you already have a second mortgage. We may require a subordination agreement from the second mortgage lender allowing our financing to remain in the first position.
- How Shop Commercial Mortgage will interact with escrow companies if you should use them.
- Information on how we treat mortgages requiring reinstatement because you are behind on payments to the primary lien holder.
- Permissions required if you plan to add an additional mortgage, often referred to as a junior lien. We need to know that you can pay our hard money financing as well as additional financing, so we may require you to submit information and obtain our consent to avoid us calling the note.
Paying off hard money financing is not impossible, but there are several steps that should be addressed. If you have questions about this or any part of hard money financing, contact Shop Commercial Mortgage for more information by calling 813-368-9919.