What is an Arizona Hard Money Loan and who benefits from these loans?
Arizona Hard Money Loans are unlike conventional loans. They are funded by private investors that are often referred to as Arizona Hard Money Lenders. These loans are based on the value of the property that is being purchased versus the borrower’s credit worthiness. The amount of the loan can be based on either the loan-to-value ratio (LTV) or the after-repair-value (ARV). The LTV is the ratio of loan divided by the value of the property being used as collateral. The ARV is what the property will be worth after the repairs will be done. The loan terms will be different depending on the lender.
Arizona Hard Money Loans are much easier to qualify for than conventional mortgages because the approval is not solely based on the borrower and their ability to pay the loan back, but on the property and what it is worth. This is because in case the borrower defaults on the loan—the lender can repossess the property, sell it and get their money back. These loans typically have 6 months to 3 year terms; in certain situations these loans can be extended out for up to 5 years.
These loans are generally meant for real estate investors for fix and flip and construction projects. However, Arizona Hard Money Lenders can finance residential properties and small business loans as well. Arizona Hard Money Lenders have the freedom to be flexible when working with borrowers. Successful real estate investors have a lender they regularly work with. Not only will the lender often lower interest rates for a repeat customer—they are able to give quick financing when the investor comes upon a property.
There are many situations in which an Arizona Hard Money Loan will benefit a borrower over traditional bank financing. When an investor comes upon a property they are able to get quick financing because funds are generally available in less than two weeks. This aids investors when competing with all cash buyers. Sellers prefer working with investors that work with Arizona Hard Money Lenders because there is security given to the seller that the deal will not fall through.
If the borrowers credit score is not sufficient to secure traditional lending or they just do not meet bank requirements, Arizona Hard Money Loans are a great alternative. Typically, Arizona Hard Money Lenders do not impose prepayment penalties; meaning, that once the borrower is able to qualify for a conventional mortgage they are able to pay off the Arizona Hard Money Loan without any penalties.
Any time a borrower does not have enough cash or access to any financing, Arizona Hard Money Loans are a great substitute for traditional lending. In this case, as the others, when the borrower finds themselves in a situation to secure traditional financing the Arizona Hard Money Loan can be paid off.
Arizona Hard Money Lenders are essentially concerned with the collateral that backs the loans. These lenders differentiate in their loan terms. Most lenders work in a certain geographic location. It is important, when researching Arizona Hard Money Lenders, that you do so in your area. Make sure once you locate a lender you ask questions. It’s not only finding a lender that will qualify that is important—it is finding one that your personality and goal mesh well together.
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.