Private Hard Money Lender in California, Texas and Arizona: April 2015

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Wednesday, April 29, 2015

Can Arizona Mortgages for Bad Credit Benefit Prime Borrowers?

For some borrowers, an Arizona mortgages for bad credit program is the only option they have to purchase a home. However, some of these bad credit loans can benefit traditional borrowers as well.

Sub-prime lending is making a comeback in a big way. With rising interest rates and a large percentage of borrowers with bad credit, many banks and mortgage brokers are back in the business of giving out sub-prime loans. In Arizona, mortgages for bad credit borrowers are on the rise with a number of equity firms, private investors, banks, and mortgage brokers giving out loans to sub-prime borrowers.

Some experts are leery of this trend, blaming sub-prime lending practices for the housing collapse in the mid-2000s and the subsequent economic recession. Because of this, restrictive mortgage regulations went into effect which have all but crippled the housing economy. With a decline in housing purchases and virtual shut out for bad credit borrowers, the government has loosened some regulations and in Arizona mortgages for bad credit are starting to resurge. But, it is not only bad credit borrowers who can benefit from sub-prime lending. Many borrowers with excellent credit can still take advantage of bad credit loans to maximize borrowing potential and minimize interest rates.

Types of Sub-Prime Loans in Arizona


One type of loan that is available for people with bad credit is an adjustable rate mortgage or ARM. An ARM is offered to subprime borrowers who would not qualify for a traditional loan. It offers a low interest rate at first but then resets to a high interest rate after a specified period, usually 1 to 7 years. Once the rate adjusts your mortgage payment will increase due to the higher interest rate. This can be a good option if you only plan on owning the property short term or if you know you will be able to qualify to refinance your loan at the end of your low rate period. Although an ARM is a type of Arizona home loan for bad credit, it can also be beneficial for borrowers with good credit. Specifically, when interest rates are high, an ARM can get you a lower rate and therefore a lower monthly payment. Once the rate resets you can either sell the property for a profit or you can refinance to a traditional mortgage.

A second type of Arizona home loans for bad credit that is available is a hard money loan. A hard money loan is secured through a mortgage broker but is backed by investors instead of a bank. This is especially beneficial for people looking to do a fix and flip or short term purchase. Depending on the merit of the property you are purchasing as well as potential for income, investors will often invest capital, even if your credit score is lower than what is ideal. It should be noted that hard money loans are short term loans only. They cannot be used to purchase a home you plan to live in for any significant amount of time. These are designed primarily for real estate investors. A hard money loan is a good option for borrowers with good credit but a high debt to income ratio or who own additional property. Hard money lenders do not have as strict of debt to income ratios as traditional banks.

A third type of loan is a type of FHA loan. An FHA loan is backed by the government and will allow you to borrow about 96.5% of the value of the home you are purchasing. This means that you won’t have to come up with a large chunk for a down payment. In addition, the government backing means that you will be more likely to qualify, even with less than stellar credit. You will pay monthly insurance on your loan. In addition to you principle and interest payments, you will also pay a PMI insurance payment. This will increase the amount of your monthly mortgage payments until you pay off 20% of the loan amount. You can also couple FHA loans with different federal programs that offer down payment assistance or cash back at closing like Home in 5. These programs are constantly evolving and changing, so make sure to talk with a mortgage broker about what you may qualify for. FHA loans are a good loan for prime borrowers who want to keep more cash in their pocket with lower down payments and cash back programs.

Make sure to choose your loan carefully and 

weight the risks and benefits of your options.


The loan types mentioned above are some examples of sub-prime loans that can benefit prime borrowers. It is important to be aware of all risks associated with loans and to know that not all lenders are created equal. There are still predatory firms that will raise interest rates and give out irresponsible and risky loans. Find a licensed mortgage broker and a real estate agent you can trust to help you navigate the world of sub-prime lending. 

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917

www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027



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Tuesday, April 28, 2015

Arizona bad credit mortgage lenders: Risk Less with a Qualified Lender

If you have bad credit and want to purchase a home, you will find yourself looking for Arizona bad credit home mortgage lenders and banks that specialize in bad credit loans. There are a number of types of lenders as well as loans that can help individuals and families find the right home loan. With every loan product there is some risk but finding the right lender can help minimize investment risks.

If you have bad credit and want to buy a home, you may think it is an impossible goal. Bad credit can make you feel isolated and alone. A FICO score of less than 620 gives you a label of a “sub-prime” borrower with rotten credit. Banks and credit companies may label you as “irresponsible” or “too risky” of an investment. Although this may make you feel alone, rest assured that there are many Americans in the same position as you. The average credit score in the United States is 640, meaning that most borrowers have less than perfect credit. In addition, nearly one quarter of all credit using Americans are classified as sub-prime borrowers. If you have bad credit, it is possible to secure a home loan, you just have to find the right lender.

With many Americans falling into the “fair” or “poor” credit classifications, there are many Arizona bad credit home mortgage lenders that can help sub-prime borrowers secure a home loan to purchase a residence or investment property. If you are searching for a bad credit home loan, it is important to know all of your options as far as lender types and institutions. If you have bad credit, you may end up paying higher interest rates and could end up with a more risky loan type. It is important to find a lender you trust to help minimize the risk associated with many bad credit loans.

Types of Arizona Home Loan Lenders to Help 

Make You Home ownership Dreams Come True


The most common type of lender is a traditional bank. A bank gives mortgages loans and uses its own criteria along with federal guidelines to determine if a borrower has the FICO score and debt to income ratio necessary to qualify for a home loan. The bank uses market conditions to set interest rates and only offers their own interest rates and loans. Although a bank does have some options for bad credit borrowers, it is usually the entity that turns down sub-prime borrowers. It is not ideal as far as Arizona bad credit mortgage lenders go because it has strict guidelines regarding credit scores as well as income qualifications.

Another common type of lender is a Arizona Mortgage Broker. A mortgage broker is an individual or firm who operates under a state license to help individuals qualify for home mortgages. Like a bank, you can get multiple loan types but, a mortgage broker is not locked into one interest rate or one lender. The broker or broker company will basically shop loans for the borrower to find the best interest rate and loan terms based on current market conditions. In addition, a mortgage broker can find loans that banks may not be able to give because the borrower or loan type is too “risky” for a traditional lending institution. This makes a mortgage broker a better choice for borrowers with bad credit.

A less common type of lender is a private investment firm. These private investment firms are run by a licensed broker who is up to date on mortgage and real estate laws, programs, and terms. The loans are funded by private investors rather than a bank. As a group of private investors, these types of lenders are more likely to look at the merit of the property as well as the potential to make money as compared to exclusively the credit score of the borrower. This makes them a good option for Arizona bad credit mortgage lenders. One example of a private mortgage investor is a company like Level 4 Funding which is run by a licensed financial professional. This is an important characteristic to look for to make sure that you are working with a legitimate firm that will help minimize your financial risk. If you want to look into private mortgage investors, a mortgage broker can help you find a good company, but most likely you will have to ask for it. In addition, you can ask an investment banker or realtor to point you in the right direction.

Arizona Bad Credit Home Mortgage Lenders Are the Real Deal



The bank is not the only place to get a home loan. If you have been turned away by a bank due to bad credit, there are other options. Make sure to do your homework and thoroughly check credentials but once you find a lender you can trust, they can help you find many different options to lead you to homeownership. 

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917

www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027



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Monday, April 20, 2015

How to qualify for Arizona Home Loans with Bad Credit

Subprime mortgages in Arizona have been considered a predatory lending practice by many law makers. The facts show otherwise as Arizona home loans with bad credit programs have typically been used by investors as a money making strategy, not by people who have been taken advantage of by banks.)

A subprime mortgage is a lending practice that can benefit borrowers with low credit scores. Typically, subprime mortgages are given to borrowers with a less than stellar credit history or to borrowers with other financial factors that make them too much a liability for a traditional loan. Based on these factors, the borrowers would not qualify for a traditional mortgage so banks give them a subprime loan with a higher than average interest rate. Because subprime borrowers represent a higher risk for the lender, most lenders charge a higher than prime interest rate.

The most common type of subprime mortgages that are offered are adjustable rate mortgages or ARMs. An adjustable rate mortgage initially offers a very low interest rate, usually below the prime rate offered by a traditional loan. For an informed investor who intends to fix and flip or only own a home for a short period of time, an adjustable rate mortgage can be a great investment tool. However, an ARM is somewhat misleading to uninformed borrowers as it initially charges a lower interest rate. After the ARM period the rate adjusts to a significantly higher rate and higher monthly payment. These types of mortgages were given out frequently by banks to un-creditworthy buyers in 2005 and 2006. Once the loan reset to the higher interest rate, many borrowers were unable to afford their new monthly payments and defaulted on their home loans. ARM were largely responsible for the increase of subprime mortgage foreclosure increases in the mid-2000s.

In addition to ARMs, many private equity firms and hedge funds also give subprime loans. Interest rates are usually higher for these loans because the borrowers represent a higher credit risk to the lender. Although there have been some predatory lenders, the majority of these firms want to help create a win-win situation. Investors make money and borrowers are able to purchase homes.
In response to the foreclosure crisis, may law makers want to eliminate Arizona home loans with bad credit programs entirely. They cite these types of loans as being predatory lending practices as the interest rates can reach as high as 9% when a traditional loan hovers around 4%. They also claim that these loans are disproportionately given to people who make less than the median level of income and there is also fear that subprime mortgages could hurt minorities or young people.

The Truth About Subprime Home Loan Arizona

As stated above, there is concern among law makers that Arizona home loans with bad credit are designed by banks to gain the most money from groups who have the least. The foreclosures of the mid-2000s helped fuel this fire. Politicians and loan reform groups make a variety of claims about the unsavory nature of subprime lending in Arizona, however, many of these claims have been proven inaccurate when the numbers are examined.

The first claim by politicians looking to discredit subprime lending in Arizona is that it would unfairly discriminate against low income borrowers. This claim is categorically false. In fact, most subprime borrowers in Arizona are above the median income line. Most subprime mortgages tend to be second mortgages that are purchased as investment properties. Subprime borrowers also tend to own fewer low value homes than traditional mortgage holders.



A second claim against sub prime mortgages Arizona is that subprime loans are unfairly given out to borrowers who are young without a substantial credit history. Subprime mortgages are not given out to mostly young borrowers. In fact, the average age of a borrower for a subprime mortgage was between 35 and 55 years of age. This indicates that subprime mortgages are not being used to penalize borrowers with insufficient credit history due to age.

Finally, another criticism is that minority borrower will be discriminated against and only offered high interest loans. A demographic study indicates that this is untrue. By analyzing zip codes and demographics, it was concluded that subprime mortgages are not more common in zip codes with a Hispanic population concentration.

Subprime mortgages are not being used by banks to unfairly discriminate against borrowers, rather than are a valuable tool for borrowers with low credit scores or as a means to purchase an investment property.

Since subprime mortgages often charge higher interest rates, they have unfortunately been lumped into the same category as title or payday loans. Some politicians see them as predatory practices without having all the facts. Arizona home loans with bad credit programs and loans are not a predatory lending practice by banks. Rather they are a tool that can be used for borrowers that would otherwise not qualify for a mortgage. Whether you are purchasing a second home as investment, or buying a home for your family to live in, don’t let a low credit score determine your fate. Contact a local mortgage broker to determine your options and see if a subprime loan is a good option for you.


Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Home Loans
Tel:  (623) 582-4444 | Fax: (888) 279-6917

www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027



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Aizona Home Loan: How to Buy a House with Bad Credit in Arizona

If you have a bad credit but are eager to buy your own home, you may be finding that traditional banks and loan types are standing in your way. However, many investors and mortgage brokers are here to lend a helping hand to turn your homeownership dreams into a reality by helping you figure out  how to get an Arizona Home Loan with bad credit in Arizona.

Bad credit can create a situation that feels almost hopeless. You will be judged by loan officers and potential employers before you even walk in the door. If you have rotten credit, chances are you have been denied a home loan, credit cards, car loans, and even jobs.  Many people and companies will stereotype you as being lazy or irresponsible based on your credit number. The truth is, bad credit can happen for a variety of reasons. Divorce, job loss, injury, or illness can cause your credit score to go down. In the current economy the average credit score is in the 600s, meaning that bad credit is more common than you may think. High fuel costs, increased taxes, inflation, and falling housing prices have put a financial strain on many Americans.

If you find yourself in the unfortunate situation of having bad credit, you may think that purchasing a home is impossible. However, there are many loans that you may be able to qualify for, even with rotten credit. If you find yourself wondering how to buy a house with bad credit in Arizona, there are a few things you need to know. First and foremost, it is possible to qualify for a home loan with bad credit. There are a number of programs and loan types geared towards sub-prime or bad credit borrowers. Secondly, there are specific benefits and risks associated with each type of loan. Knowing all the benefits as well as the risks can help you make an informed credit decisions.

Arizona Home Loan Types that Benefit Bad Credit Borrowers

One type of loan that can benefit you if you have bad credit is an FHA loan. An FHA loan is a loan type that is insured by the federal government. In order to obtain an FHA loan, you need to work with an FHA accredited lender. The lender will approve you for the loan based on your income and credit score. Each month you will pay extra in the form of a monthly insurance premium or MIP. The MIP will vary based on your loan amount and the value to debt ratio of the property you purchase. The reason you pay this insurance premium is to insure you loan against default. If you default on the loan, the FHA will pay the bank back. This is why an FHA loan is an ideal loan type for borrowers wondering how get a Home Loan with bad credit in Arizona. Since the loan is insured by the government, the bank is more likely to give a loan to a borrower that it views as being higher risk. In order to qualify for an FHA loan, you will need to have at least 3.5% of the purchase price to put down so make sure you save accordingly. Not having this could delay your loan.


 Another type of loan that you will want to look into if you have bad credit is an adjustable rate mortgage or ARM.  An ARM is a mortgage that has a fixed interest rate for a set period of 1 to 7 years. During that period you will pay a relatively low interest rate, usually lower than the prime rate. After the initial fixed period, the rate will reset to a higher rate and your mortgage payment will increase. Borrowers with bad credit can take advantage of this program as a way to own a home because the initial payments are low due to the low interest rates. Keep in mind that after the rate resets your payment will increase significantly. An ARM is a good option for borrowers who plan on either selling or refinancing before the rate resets. In order to qualify for an adjustable rate mortgage, you will need to have at least 10% of the purchase price to put towards a down payment. If you are buying a home for $200,000, this means that you will need at least $20,000 in savings.

To help figure out how to buy a house with bad credit in Arizona, contact an Arizona Home Loan broker.


A mortgage broker can help you analyze each loan type available to you with bad credit. A broker can help you navigate constantly changing loan programs to choose the best loan for your financial situation. Owning a home is a great first step in rebuilding your bad credit. Stop waiting, and find a broker to help make your dreams come true. 

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Home Loans
Tel:  (623) 582-4444 | Fax: (888) 279-6917

www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027



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Wednesday, April 15, 2015

Arizona home mortgages for bad credit: Why Sub-Prime Lending Is Making a Comeback

Hard economic times have caused more Americans to have sub-prime credit scores leading to an increase in Arizona home mortgages for bad credit programs and loan types. As interest rates rise more borrowers are using sub-prime loans to make home purchases and refinance high interest conventional loans.

With recent economic hardships, more and more Americans are finding themselves in the position of having a “fair” or even “poor” credit rating. Job loss, divorce, rising fuel prices and a host of other factors have led to nearly 25% of all credit using Americans to have a sub-prime credit rating, meaning their FICO score is less than 640. This can be a significant obstacle when it comes to purchasing or refinancing a home. Two types of loans that can help you purchase or refinance a home with bad credit are an FHA loan and an adjustable rate mortgage.

An FHA loan is a program for Arizona home loan for bad credit borrowers. If you have bad credit, an FHA loan may be a good option for you to secure a home loan. An FHA loan is a government backed loan. Each month you pay extra insurance against default. The loan is secured by the Federal government so lenders are more likely to give them to borrowers with bad credit. In order to qualify for an FHA loan you will need to have 3.5% of the purchase price to put down. You will also pay extra for monthly mortgage insurance which can vary based on the amount of your loan. For many bad credit borrowers an FHA loan is a good path for homeownership. The Federal Housing Administration does not give out loans. In order to obtain an FHA loan you will need to find a mortgage broker, bank, or investment firm that is certified to give out FHA loans. The FHA provides mortgage insurance to the lender on their loans. This mortgage protects the lenders from losses due to homeowner default. The lenders bear less risk because the FHA will pay an insurance claim to the lender if the homeowner defaults on their loan the lender has to foreclose on the property. This insurance makes and FHA loan a good program for bad credit borrowers because a lender is more likely to make a loan to a borrower with bad credit if they have FHA insurance. However, borrowers with good credit can also apply for and receive an FHA loan. For prime borrowers, the small down payment option of an FHA loan is often an attractive feature.

Another type of loan that is making a resurgence recently is an adjustable rate mortgage or ARM. An adjustable rate mortgage is a mortgage with an interest rate that adjusts after a fixed period. The fixed period is anywhere from 1 to 7 years, with the most common terms being 3 or 5 years. During the initial fixed period, the interest rate on the loan is very low, usually lower than prime. This means that your monthly mortgage payments will be low. After the fixed term, the rate will adjust to a higher interest rate. This will increase your monthly payment amount due to the higher interest payments. When your interest rate does reset, it will be to a higher than prime rate.

Why Are ARMs Making a Comeback?

When interest rates on home mortgages rise, it has a big impact on the mortgage loan market. In late 2014, rates on tradition 40 year mortgages rose from about 3.5% to 4.5% or more. This significant increase had a dramatic effect on monthly mortgage payments for home buyers and made it harder for many borrowers to qualify for home loans. However, there is one type of loan that rates did not increase for and that is an adjustable rate mortgage or ARM. An ARM is typically consider an Arizona home loans for bad credit or sub-prime borrowers program, but in the case of rising interest rates it can be a good option for prime borrowers as well.


Until recently, it only made sense for individuals looking for Arizona home mortgages for bad credit to look into adjustable rate mortgages. With traditional mortgage rates low, prime borrowers could easily qualify for and afford the home they needed with a 30 year fixed rate. However, once interest rates rose, monthly payment amounts increased by hundreds of dollars each month and many borrowers were unable to qualify for the loan amount they needed. As a result, many prime borrowers benefited from an adjustable rate mortgage.

If you have bad credit or want to take advantage of the lower interest rates offered by an ARM or the lower down payment offered by an FHA loan, contact an Arizona mortgage broker.

If you have bad credit, you have probably been turned away by a bank if you applied for a home loan. You may think that owning a home is impossible. However, there are a number of programs that can help you qualify for a home loan. The best first step is to ditch the bank and find a company that specializes in helping individuals and families figure out Arizona mortgages for bad credit. A good
first stop is a mortgage broker. Unlike a bank, the broker does not actually loan out the money for a home loan. Instead he or she shops different banks to help you find the best loan for your purchase and credit situation. This allows more flexibility in terms of the types of loans that the broker can find as well as lenders. A mortgage broker or mortgage company can act as your intermediary and usually get you better loans and better terms than you could get by going straight to a bank, especially if you have bad credit.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917

www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027



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Monday, April 13, 2015

Arizona Home Loans for bad credit: FHA Loans

The Federal Housing Administration is a government entity that can help secure Arizona Home Loans for bad credit borrowers. The government backed loans often offer bad credit borrowers as well as first time home buyers a viable option to aid in home ownership.

If you have bad credit, you have probably been turned away by a bank if you applied for a home loan. You may think that owning a home is impossible. However, there are a number of programs that can help you qualify for a home loan. The best first step is to ditch the bank and find a company that specializes in helping individuals and families figure out Arizona home loan for bad credit. A good first stop is a mortgage broker. Unlike a bank, the broker does not actually loan out the money for a home loan. Instead he or she shops different banks to help you find the best loan for your purchase and credit situation. This allows more flexibility in terms of the types of loans that the broker can find as well as lenders. A mortgage broker or mortgage company can act as your intermediary and usually get you better loans and better terms than you could get by going straight to a bank, especially if you have bad credit.

One loan type your broker will recommend is an FHA loan. An FHA loan is a program for Arizona home mortgages for bad credit borrowers. If you have bad credit, an FHA loan may be a good option for you to secure a home loan. An FHA loan is a government backed loan. Each month you pay extra insurance against default. The loan is secured by the Federal government so lenders are more likely to give them to borrowers with bad credit. In order to qualify for an FHA loan you will need to have 3.5% of the purchase price to put down. You will also pay extra for monthly mortgage insurance which can vary based on the amount of your loan. For many bad credit borrowers an FHA loan is a good path for homeownership.

The Federal Housing Administration does not give out loans. In order to obtain an FHA loan you will need to find a mortgage broker, bank, or investment firm that is certified to give out FHA loans. The FHA provides mortgage insurance to the lender on their loans. This mortgage protects the lenders from losses due to homeowner default. The lenders bear less risk because the FHA will pay an insurance claim to the lender if the homeowner defaults on their loan the lender has to foreclose on the property. This insurance makes and FHA loan a good program for bad credit borrowers because a lender is more likely to make a loan to a borrower with bad credit if they have FHA insurance.

History of the FHA and Its Role in Arizona home mortgages for bad credit Borrowers


The FHA was established in 1934 during the Great Depression. The goal of the agency is to help all Americans purchase homes and to help stimulate the housing economy. In the 1940s the FHA helped finance home loans for veterans and military families. By the 1980s the FHA moved into falling home prices and made it possible for home buyers to get financing during needed during the recession. By 2001 homeownership in the United States was at a record high. The FHA has insured over 34 million mortgages since its inception.

As illustrated above, the FHA has been in the home mortgage business for over 80 years. It is completely self-funding and does not require tax payer money or government bail outs. This makes it ideal for Arizona home mortgages for bad credit because lenders know and trust the agency. In addition, there are no surprises in terms of interest rates like there are in adjustable rate mortgages. FHA loans offer fixed interest rates for 15 to 30 years. However, keep in mind that you will pay mortgage insurance each month. The amount of this payment varies depending on the amount of your loan. You will pay this insurance until your loan to value ratio is less than 80%. Meaning, you will have an extra monthly payment until you have paid off 20% of your loan. If the value of your home increases dramatically you can look into refinancing to eliminate this monthly payment. In addition, there are certain mortgage arrangements that can be made during your real estate negotiations to have the seller pay a portion of this insurance upfront.

Talk with a mortgage broker to determine if an FHA home loan is a good option for you.
The Federal Housing Administration has helped many homeowners obtain loans they otherwise may not qualify for. A mortgage broker can walk you through the process of qualify for an FHA loan as well as describe any funds you may need. Call a broker today to take the next steps to purchasing a home.


Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917

www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027



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