If you are not familiar with Arizona Hard Money Loans then the term 90% Arizona Hard Money Loans is sure to be confusing. But with just a little information you will learn how these loans can help you make a great deal of money.
Many borrowers are under the misguided conception that Arizona Hard Money Loans are loans that operate on the fringe of legality and are considered shady at best. But that could not be further from the truth. A hard money loan is simply a short term loan which is offered by a private lender. Unlike traditional loans from a bank or mortgage company, Arizona Hard Money Loans are asset-based loans. This means that the qualification for the loan is not solely based on the borrower’s credit score. In the case of hard money, the loan to value ratio, or LTV, is actually more important than any other factor.
The loan to value ratio is a means of measuring the percentage of a property’s value that’s being financed with the loan. The amount of the loan is divided by the property’s appraised value to determine the LTV. Most Arizona Hard Money Lenders have an LTV rate that they are comfortable funding on the average property. In many cases that number is about 75% of the value of the property. This limit is built-in protection for the lender in the event of the borrower defaulting on the loan. If the loan is never more than 75% of the value of the property, then the lender is relatively certain to be able to recover all of his or her investment should it become necessary to take possession of the property due to default on the payments.
The remaining 25% of the value of the property is basically the equity that the borrower paid in a down payment. This is also good for the borrower as the instant equity can be used to secure funding for renovations in the case of a fix and flip. The equity also represents less money that the borrower is paying interest on.
In the case of 90% Arizona Hard Money Loans, these are a great deal for borrowers because they are offered the opportunity to borrow a full 90% of the value of the real estate that they are purchasing. These loans often have a bit higher interest rate due to the higher LTV, but many borrowers are willing to pay more interest. These loans are typically very appealing to first-time real estate investors who do not have a large sum of cash to use for a 25% down payment.
Another group that benefits from 90% Arizona Hard Money Loans are first time buyers. These loans allow first-time buyers to finance 90% of their purchase and have the money quickly. Then the buyer has the opportunity to shop around to secure a traditional mortgage or to refinance for a longer term with the private lender. Being able to finance such a large percentage of a real estate purchase with a private lender can offer many huge benefits to a wide variety of borrowers.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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