Hard money loans are the fast, flexible solution for real estate investors when time is tight or traditional banks slam the door. But they’re not meant to stick around forever.

At some point, you’ll want to swap that short-term loan for a long-term, lower-rate mortgage. The question is: how?

In this guide, we’ll walk you through everything you need to know to refinance your hard money loan into a conventional mortgage—without tripping over common mistakes.

Let’s dive in.

1. Know When It’s Time to Refinance

Hard money is great for:

  • Fix-and-flips
  • Fast acquisitions
  • Bridge scenarios
  • Projects banks won’t touch

But it’s not cheap. Rates often run from 9% to 12%, and terms are short—usually 6 to 18 months.

If your project is complete, the value is up, and you’re planning to hold the property, it’s probably time to lock in a long-term loan and stop bleeding interest.

2. Build a Refinance Timeline (Before the Clock Runs Out)

Start planning your exit early. Don’t wait until 30 days before your loan matures—by then, you’re playing with fire.

Most conventional lenders will want:

  • The property to be stabilized (rented or ready-to-rent)
  • Completed renovations (if applicable)
  • A clean title
  • 60–90 days to process the new loan

So back your timeline out. If your hard money loan matures in 6 months, you should be laying the groundwork to refinance by month 3.

3. Understand What Conventional Lenders Want to See

Conventional and bank lenders are pickier than hard money folks. They want:

  • A good credit score (typically 660+)
  • Proof of income or rental income
  • Strong debt-to-income (DTI) ratio
  • Solid appraisal

And they want it documented. Every penny, every square foot, every lease.

Pro tip: Keep meticulous records during your hard money phase. Save receipts, contracts, permits, and before/after photos. This will all help your case with the new lender.

4. Know Your Loan Options

Depending on your goals, you might refinance into:

  • Conventional mortgage: Great if the property is stabilized and you qualify personally
  • DSCR loan: Based on the property’s income, not yours (perfect for rental properties)
  • Non-QM mortgage: For self-employed or non-traditional borrowers

Work with a mortgage broker who understands investor loans. They’ll help you pick the right path based on your credit, property type, and exit strategy.

5. Get the Property Ready to Impress

Want a better appraisal? Clean it up. Fix the little things. Make it photo-ready.

Appraisers are human. A neat, finished property with good curb appeal can nudge your value up—and that matters when you’re trying to lock in a low loan-to-value ratio and strong terms.

Also: if it’s a rental, make sure it’s rented. A leased property with a paying tenant often makes a lender feel a lot more confident.

6. Don’t Let Title or Insurance Trip You Up

You’d be surprised how many refinances hit the brakes because of:

  • Title errors
  • Open permits
  • Insurance gaps

Check all this before you apply. Talk to your title company. Make sure your insurance is current and reflects the right use (residential, rental, commercial, etc.).

7. Have a Backup Plan—Just in Case

Sometimes, refinancing doesn’t go according to plan. Appraisals come in low. Lenders change criteria. Credit scores dip.

Have a plan B:

  • Line up an extension with your hard money lender (Lending Bee offers flexible terms when we know you’re being proactive)
  • Explore bridge-to-perm lenders
  • Keep cash on hand to pay down the loan if needed

The smoother your plan B, the more negotiating power you’ll have.

8. Work with a Lender Who Gets Investors

Not all lenders speak “investor.” You need someone who understands:

  • Value-add deals
  • Income-based underwriting
  • Property rehab timelines

At Lending Bee, we’re in the trenches with real estate investors every day. We’ve helped hundreds of clients transition from hard money to long-term financing without panic, penalties, or profit loss.

We can even help structure your original loan with the exit in mind, so you’re ready when the time comes.

9. Final Steps: Lock It In

Once the new lender is ready to go:

  • Order payoff from your hard money lender
  • Coordinate with title to close the new loan
  • Confirm funds get wired directly to pay off the original loan

Boom. You’re out of hard money and into long-term financing—with a lower rate, more time, and better cash flow.

Exit Smart, Not Scrambled

Hard money loans are tools, not traps. Used wisely, they give you speed and flexibility.

But don’t wait until the 11th hour to refinance. Start early, line up your documents, prep the property, and work with pros who know how to make it happen.

At Lending Bee, we help investors plan their exit before the ink is dry on their initial loan.

Need help refinancing a hard money loan? Let’s get it done the right way. Reach out today.