The Quick Read: With sixty days left and no takeout loan lined up, you run three tracks at once: ask your lender for a written extension while the loan is still current, start a long-term refinance application in parallel, and decide by a set date whether to sell instead, because no rule gives you a right to more time.
- Read your note today for the maturity date, the extension option and fee, default interest, and payoff mechanics.
- Ask for an extension while payments are current, and get the new date and fee in writing as an amendment.
- Apply for a DSCR refinance at the same time. The new lender’s appraisal and the rent coverage decide the loan, not your after-repair estimate.
- Pick a go/no-go date inside the window so a slow lender never makes the decision for you.
A hard money loan is built to end. The balance comes due on a set date, and the question for the last sixty days is how you want it to end. This guide walks through the order of operations from a broker’s seat, where a file looks the same whether the property is a finished rental or a rehab that ran long.
What this loan actually costs to carry.
Hard money is sized against the project and priced by time. Enter the deal and see how much the program will lend, the cash required at closing, the carry while you hold it, and what is left at the exit.
Leverage tiers on the current program: 85% with fewer than 2, 90% with 2 or more, 93% with 5 or more completed projects — every tier capped at 75% of after-repair value. Loan amounts up to $5,000,000, larger by exception; terms of 6 to 18 months, interest-only, no prepayment penalty. The rehab portion funds in draws against completed work, not at closing.
Program parameters shown update from Lendmire’s centralized guideline source. Rate, points, and months are editable assumptions, not quoted terms.
Cost cap sets the loan · positive spread
Illustrative estimate only — not a quote, Loan Estimate, approval, or commitment to lend. Rate, points, and months are editable assumptions. Hard money is business-purpose financing for real estate investors, not a consumer mortgage. Leverage on the current program tops out at 93% of project cost for investors with a documented track record, capped at 75% of after-repair value, with rehab funding up to 100% of the documented budget released in draws; actual terms vary by lender, borrower experience, property, and exit. Lendmire is a mortgage broker, not a lender.
Key Terms Defined
Maturity is the date the full loan balance comes due.
Balloon payment is the lump sum due at maturity because your interest-only payments never reduced the principal.
Extension is a lender’s written agreement to move the maturity date, usually for a fee. It is normally papered as a modification or amendment.
Payoff statement is the lender’s letter showing exactly what it takes to retire the loan on a given date.
Seasoning is the waiting period a new lender wants between buying a property and refinancing it, usually measured from the recorded deed.
DSCR (debt service coverage ratio) is the property’s monthly rent divided by its monthly principal, interest, taxes, insurance, and any association dues (PITIA).
LTV (loan-to-value) is the new loan balance divided by the property’s appraised value.
What Actually Happens When the Note Comes Due
Nothing automatic rescues you on the maturity date. The loan is due, and the lender decides whether to extend, accept a payoff, or start enforcement.
A First Centennial Title article on hard money balloons describes three outcomes at maturity. You get an extension, you sell or refinance, or the lender records a Notice of Default at its option. It adds that extensions usually go to borrowers with on-time payment histories.
That matches what brokers see. Lenders tend to say yes when the loan is current, the project is moving, and the borrower arrives with an exit plan and a fee. Private lenders have wide latitude on pricing once the loan is due, so any extension number you hear is a lender’s choice, not a standard.
Motley Fool’s balloon payment entry makes the same planning point from the investor side. Anyone using a balloon loan must be sure they can pay or refinance before the due date. Sixty days out is when that certainty gets tested.
Where Do You Actually Stand Today?
Your cause for “no refinance yet” decides your first move. Sort yourself into one of these rows before you spend a day on the wrong problem.
| Your situation | Primary move | Why |
|---|---|---|
| Finished and rentable | Start the DSCR refinance now | Rent and appraisal can be tested |
| Rehab unfinished | Extension conversation first | Most lenders want a rentable property |
| Finished but vacant | Rent-schedule appraisal or lease-up | Coverage needs rent evidence |
| Under six months owned | Rate-and-term sized to payoff | Cash-out wants seasoning |
| Value in doubt | Extension plus a cash backstop | A low appraisal shrinks the loan |
If two rows apply, you carry both problems. A vacant property that was bought four months ago needs lease evidence and a structure that respects seasoning.
The Sixty-Day Timeline
Count back from maturity, not forward from rehab completion. This table is a working schedule. The dates are your checkpoints, not a prediction of how long any lender will take.
| Window | Action | If it slips |
|---|---|---|
| Days 60-45 | Read note, request extension, apply | Extension becomes the primary plan |
| Days 45-30 | Order appraisal, gather documents | Go/no-go on the refinance |
| Days 30-14 | Lock the extension in writing | Fallback decision: sell or bring cash |
| Days 14-0 | Refresh payoff statement, final conditions | Expect default-style fees to start |
| Past maturity | Talk to lender, keep the application going | Call a real estate attorney early |
Set the day-45 check as a real decision. If the refinance has not produced a clean path by then, the extension stops being a courtesy and becomes the main plan.
What to Bring to the Lender Conversation
Treat the extension request as a fresh credit decision, because the lender does. Bring evidence that the loan is performing and the exit is real.
- Proof of on-time payments, since a clean history is the strongest argument you have.
- A short, honest status on the project, with photos and a budget-to-date if the rehab is unfinished.
- A dated exit plan, such as an application already submitted to a long-term lender.
- Your offer on the fee, because lenders respond better to a proposal than to an open question.
Then get the answer in writing. A usable amendment confirms the new maturity date, the fee amount, how the fee is paid, and whether any other terms change. The timing of the fee payment varies: it can come with the next payment, or it can be added to the payoff at refinance or sale. Pick the one that hurts your cash position least.
Keep your behavior clean while this runs. Make every payment on time, put communication in writing, and avoid new liens or changes to the entity or title, since each of those can derail both the extension and the refinance.
How a DSCR Underwriter Treats the Takeout
The DSCR lender never looks at your hard money payment. It tests whether the rent covers the payment on the new loan, and it values the property from its own appraisal.
Here is the sequence, step by step.
1. Value. The new appraisal sets the number. Your after-repair estimate is a plan, not a valuation. Appraisals normally include a rent schedule, which also supports a vacant unit.
2. Leverage. On a cash-out refinance of a standard rental, most programs across the wholesale network top out around 75% LTV. The loan size is that cap times the appraised value.
3. Payoff math. Cash back equals the new loan, minus your payoff, minus closing costs. When that result is negative, you bring cash to the table.
4. Coverage. The ratio is monthly rent over PITIA on the new loan. Select programs start at 1.00, and stronger ratios open better pricing and leverage. A separate path through select lenders in the network takes coverage below 1.00, with leverage and terms adjusted.
5. Credit. A 620 floor exists in parts of the network, most programs want around 660, and 700 or higher unlocks the strongest leverage tiers.
6. Reserves. These vary by lender, leverage, loan size, and transaction type. About six months of PITIA is common.
7. Seasoning. A cash-out typically wants about six months of ownership, measured from the recorded deed. A rate-and-term loan sized to the payoff usually has lighter or no seasoning requirements.
These figures are typical ranges from select lenders in the network and vary by borrower, property, and loan scenario. Nothing here is a commitment to lend. Lendmire’s complete DSCR loans guide covers the full qualification picture.
One caution on the numbers: clearing 1.00 does not mean the property produces positive cash flow. The ratio compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses all sit outside it.
A broker with several DSCR lenders also gives you a backup. Guidelines differ across the network, so a file that one lender declines may fit another lender’s rules on seasoning, leverage, or property condition.
Your Exit Options Side by Side
Which exit wins depends on where the property stands on day sixty. This table compares the main paths.
| Exit | Works when | Main catch |
|---|---|---|
| Extension | Loan is current, plan is credible | Fee and carry add to payoff |
| Rate-and-term DSCR | Payoff fits under the leverage cap | Cash-out later means two closings |
| Cash-out DSCR | About six months owned, strong value | Appraisal and cap limit proceeds |
| Another bridge or hard money loan | Property cannot yet qualify long term | Refinancing hard money into hard money can be difficult |
| Sale | Equity is thin or coverage is weak | A cash-buyer sale may lower proceeds |
The payoff-only route solves the deadline. It can also cost you a second set of closing costs if you cash out later, so ask whether the extra seasoning wait is worth the cleaner single transaction.
For a deeper look at timing questions, Lendmire’s piece How to Refinance a Hard Money Loan With No Seasoning covers what to do when the ownership clock is the obstacle.
Extend or Exit? The Break-Even Test
An extension is a cost charged against your eventual cash-out, so test it like any other cost. Compare what waiting buys you with what it costs.
The test has two sides:
- Cost of extending: the extension fee plus the added carry on the hard money loan through the new date.
- Value of waiting: extra proceeds from meeting seasoning, a finished rehab that lifts coverage, or a lease that turns a vacant property into a rentable one.
Run it with plain ratios, not guesses. Say the property sits just under 1.00 coverage today and a signed lease would lift it to around 1.15x. If that shift moves you into a better leverage tier, a short extension can be the cheaper path. If the lease would not change the ratio, you are paying for time that buys nothing.
A forced refinance on a weak file can cost more than an extension. A forced sale or a default can wipe out equity. The opposite mistake also happens: a long-term loan with a prepayment penalty can lock in a weak position when rent will not rise soon. A short extension may be better in that case.
Extension fees can also bring up tax questions.
Running Parallel Tracks
Parallel does not mean frantic. It means each track has a trigger that cancels it.
- Refinance track. Keep it alive until the appraisal lands. A value that supports the payoff under the leverage cap keeps it going. A low value pauses it.
- Extension track. Keep it alive until you have a signed amendment. Do not stop pushing because the lender sounded friendly on a call.
- Sale track. List or line up a buyer only if the day-45 check shows the other two failing.
Extension fees and accrued interest enlarge your payoff, so they change the takeout math. Rerun the cash-back calculation every time a fee is agreed. If you roll hard money fees and interest into a cash-out, the larger payoff can push the loan over the leverage ceiling.
Do not assume your current hard money lender is also your long-term lender. Some pause or change their long-term programs, and relying on that assumption has stranded investors a month before maturity.
Payoff and Closing Mechanics
A payoff statement expires. Ask for one with a valid-through date, and ask what the daily interest (per diem) is if closing slips past that date. When the date moves, request a refreshed letter instead of wiring from an old one.
Your DSCR file typically needs the lease or market-rent appraisal, title and vesting documents, insurance, entity documents, and the payoff statement. Entity-titled files, such as those held in an LLC, are subject to lender program eligibility, so confirm that early. A missing insurance binder delays a file as surely as a low appraisal.
At closing, the title company wires the payoff to your old lender, and the old lender releases its lien. Confirm that release is part of the process, because an unreleased lien creates problems later.
Edge Cases Where the General Rule Breaks
Rehab unfinished. Most lenders want a rentable property, so this is an extension conversation, not a refinance application.
Finished but vacant. You have three options: a market-rent appraisal, a short lease-up, or a no-ratio structure. No-ratio programs are available only through select lenders, generally for borrowers who already own a primary residence, and they typically want stronger credit and meaningful equity.
Low appraisal. You can contest it, bring cash, take a smaller loan, or extend.
Delayed financing. This special cash-out rule for recent cash purchases generally does not apply once the purchase was financed with a loan secured by the property. A hard money purchase is usually treated as a standard cash-out with seasoning. Some outside sources suggest it may work for hard money buyers, so verify it with each program. Where it does apply, it recovers your cost, not appreciation.
Past maturity. Default-style interest and fees may already be running. Talk to the lender and keep the application moving at the same time.
If the Lender Says No or Goes Quiet
Missing maturity makes the whole balance due. The Consumer Financial Protection Bureau explains that refinancing before a balloon comes due may be possible, but a drop in property value or a worse financial position can block it, and failing to pay can lead to foreclosure. That page covers consumer mortgages and is useful for the concept. DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage.
What happens next follows your note and state law. If the lender signals enforcement, talk to a real estate attorney early, before a notice is filed, since options narrow after that.
Lenders are friendlier before default than after, which is the strongest reason to ask early.
Common Mistakes
- Believing you are owed an extension. You are not, and a lender can set the price.
- Planning a last-minute refinance. Value and finances can change before closing.
- Sizing the loan off your after-repair value. The new appraisal sets it.
- Treating 1.00 coverage as cash flow. It is only rent against PITIA.
- Expecting your hard money history to carry into the DSCR file. The underwriter asks whether rent covers the new payment.
Frequently Asked Questions
Can I ask for an extension after maturity?
You can, but your position is weaker. Default-style interest and fees may already be running, and lenders are more flexible before default than after. Ask while the loan is current, and keep your refinance application moving while you talk.
Do late payments hurt my chances of an extension?
Yes. Extensions typically go to borrowers with on-time payment histories, and a missed payment gives the lender a reason to decline or to price the extension higher. If you are already behind, bring the account current first and explain it in writing.
What if my appraisal comes in low?
A low value shrinks the loan available under the leverage cap, so you may fall short of the payoff. You can contest the appraisal, bring cash to closing, take a smaller loan, or extend. Pick the option that keeps you out of default.
Can I refinance a hard money loan before six months of ownership?
Often, yes, but as a rate-and-term sized to the payoff, not as a cash-out. Cash-out typically wants about six months of ownership, measured from the recorded deed. Rate-and-term usually carries lighter or no seasoning, subject to lender guidelines.
Is selling better than refinancing?
It depends on equity and coverage. A sale ends the problem, though a cash-buyer sale may mean lower proceeds. If rent covers the new payment and the appraisal supports the payoff, refinancing keeps the property. If coverage is weak and rent will not rise soon, selling can protect your equity.
Next Steps
If you are buying, rehabbing or refinancing an investment property on a short timeline and want to see how the numbers work, Lendmire can help you compare hard money options based on the project, the exit plan, leverage, and your goals. Many investors refinance out of hard money into long-term DSCR investor loans once the property is stabilized, and Lendmire brokers that path through select lenders in its wholesale network across 41 markets, including Washington, D.C. Call 828-256-2183 to talk through your maturity date.
A maturity date does not move because a project did, so the investor who counts back from it keeps every option open longer than the one who counts forward from the finish line. If a lender has already said no, Lendmire’s piece Hard Money Exit Denied? Five Reasons a Permanent Lender Says No and What Fixes Each covers the repairs that tend to work.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage built around DSCR investor lending, with programs available in 41 markets, including Washington, D.C. DSCR lenders commonly evaluate rental-income coverage instead of personal income paperwork — a practical fit for LLC-owned and multi-property investors. Terms vary by lender, property, leverage, and program. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. First Centennial Title: Hard money loan balloon payment
2. Motley Fool: Balloon payment
3. Consumer Financial Protection Bureau: What is a balloon payment?
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Refinance Into a DSCR Loan Right After a Hard Money Purchase? · Is a Hard Money Loan Term Long Enough to Rehab and Refinance? · Can You Use Hard Money to Buy and Rehab a Duplex?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.