Refinancing a maturing balloon payment
My hard money loan is about to mature — how do I refinance before the balloon comes due?
A maturing balloon is a deadline forcing two questions at once — does the leverage reach far enough to retire the balance, and does the property’s cash flow clear the new lender’s DSCR floor — and a property that has not fully stabilized yet can fail either one even as the calendar keeps moving.
- DSCR rate-and-term refinance Retiring a maturing balance under deadline pressure needs a lender whose leverage reaches the payoff amount and whose DSCR floor the property can actually clear — both at once, not just one.
- Shopping broadly with no urgency built into the timeline A balloon maturity date is a hard deadline, not a target — starting the refinance process without enough runway before maturity risks a default or an expensive short-term extension regardless of how favorable the eventual terms would have been.
Lenders in the directory
Who publishes criteria this deal clears
Matched across all 37 lenders in the directory on published maximum LTV, published minimum DSCR. This list is computed from stored criteria, not curated — it changes when a lender’s published figures change.
Writes the product, has not published the threshold
These 15 carry a relevant product but have not published the figure this scenario depends on, or carry no verification date. We will not claim they qualify and we will not claim they do not — ask them directly.
Why this is a harder problem than a proactive refinance
The rate-and-term refinance covered elsewhere in this cluster assumes time to shop and negotiate. A maturing balloon removes that slack: the loan matures on a fixed date regardless of where the refinance application stands, and a missed maturity typically triggers default-rate interest or worse under the original loan’s terms. This page combines a leverage requirement with a DSCR requirement because a balloon refinance under deadline pressure has to clear both simultaneously — leverage to cover the payoff, and cash flow to satisfy the new lender’s coverage floor — and a property still stabilizing after a rehab or a recent lease-up can be marginal on either one.
Why DSCR is the added variable here specifically
A property that was rehabbed and leased up relatively recently may not yet be cash-flowing at the level a fully stabilized rental would, particularly if lease-up took longer than planned or initial rents came in below projection. Combining a minimum DSCR requirement with the leverage requirement in this page’s match criteria reflects that a maturing-balloon refinance is not just a leverage question the way a straightforward rate-and-term refinance can be — it is a leverage question and a cash-flow question happening under the same deadline.
What buys time if the numbers do not clear in time
See extension options when closing slips for what a short-term extension with the existing hard money lender typically involves, and switching lenders mid-process if the original refinance application has stalled and the maturity date is close enough that a change in strategy is warranted.
What to have ready
- Current loan documents showing the exact maturity date
- Trailing rent roll and any lease-up history since stabilization began
- Current payoff statement including any exit or extension fees
Questions
What happens if I miss the balloon maturity date?
Why does this page require both leverage and DSCR, unlike the rate-and-term refinance page?
Can I get an extension instead of refinancing immediately?
Terms used on this page
- Seasoning Period — A seasoning period is the minimum time a lender requires you to have held a property, a loan, or funds before it will lend against them. Title seasoning is the version that most affects investors.
- Debt Service Coverage Ratio (DSCR) — DSCR is a property’s gross monthly rent divided by its total monthly mortgage payment. A DSCR of 1.00 means the rent exactly covers the payment; 1.25 means rent exceeds the payment by 25%.
- Hard Money Loan — A hard money loan is short-term real estate financing secured by the property and underwritten mainly on its value, typically from a private lender rather than a bank.