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

Featured Post

The Big Show is Coming to Town.

Don’t do it…it’s a big mistake flipping homes can cost you a lot of money . Every week the house flipping circus comes to town and adve...

Wednesday, July 29, 2015

How to Use Arizona Bridge Loans When You Are Buying and Selling a House

When you are needing to move, buying a new home while selling your existing home can be a stressful and complicated process. Often you need to sell your current home to finance the down payment on your new home. Short term Arizona bridge loans can be a valuable took to ensure you are able to buy the home you want and sell yours more easily.

                When you buy your first home, you probably don’t think too much about the timing other than issues like no one wants to move in the summer or when your lease is up at your current rental. However, once you are looking to upgrade from your starter home to something larger, timing become essential. Most buyers need to use funds from their current home to fund the down payment on their new home. In an ideal world, you would be able to close on your home in the morning and close on your new home the afternoon of the same day. This sounds ideal but it rarely happens. Due to market conditions and the stress of showing a home, trying to sell and buy at the same time can seem almost impossible.

                You may find yourself stuck between a rock and a hard place. Although you can qualify for both home loans, you can’t produce a down payment for the new home without selling your existing home. Your home may not be getting any offers because a lived in home does not show as well as a vacant or staged home, but you need somewhere to live until you can purchase a new home. Arizona Bridge loans are a specialized type of short term loan that can help.

                Arizona Bridge loans are short term loans meant to help bridge the gap between selling your home and buying a new property. A bridge loan is a short term loan that you can get in addition to a home mortgage to cover the down payment. You will make payments on the bridge loan until you sell your first property and can pay the loan back in full. The bridge loan is contingent on the equity in the home that you are selling. Arizona Bridge Loan have low debt to income ratios and no set amount of paperwork for closing. Rather than being based on a FICO score or income number, bridge loans are based on what makes sense for each financial situation.
               

Benefits of Arizona Bridge Loans


Bridge loans have several benefits for the borrower. Namely, they allow them to put their existing home on the market without being inconvenienced with appointments for showings. Because the owners have already purchased and moved into their new home the home on the market can be decluttered and staged for optimum showing. Staged homes sell more quickly and for higher dollar amounts that homes that are lived in during showings. If getting top dollar for your home is your goal, a bridge loan may help you move into your new home so that your existing home shows at its best.

Another benefit of a bridge loan is that many do not require payments for a couple months. Some mortgage brokers can get deals where you won’t make payments on a bridge loan for up to four months. If you are able to sell your home during that time you won’t ever have to make a monthly payment on the bridge loan as you can use the cash you get from selling your home to pay it off.

Bridge loans can also be helpful if you find “the one” before your home sells. You can always make a contingency offer, meaning that you will purchase the home when yours sells. However, if you are in a multiple offer situation or a seller’s market, having a contingency offer accepted can be tricky. A bridge loan gives you the cash you need to buy the home before your home sells

Risks of Arizona Bridge Loans


                Although there are many benefits of bridge loans, there are also some drawbacks and risks. First and foremost, it is important to keep in mind that bridge loans usually have higher interest rates and fees. Interest rates vary depending on market conditions. Talk with a mortgage broker to choose the best loan terms for your unique financial situation.

                In addition to bridge loan payments, keep in mind that you will also have to pay two mortgage payments until your other property sells. This can cause stress for some families if they are stretched too thin with payments. Pricing the home you are selling competitively can help make it sell faster and alleviate some of this stress. Also, you will need to be able to qualify for both home loans at the same time since you will be carrying both for a short period. This can be difficult for some borrowers. A mortgage broker can help find programs that will make this possible.

                If a bridge loan sounds like a good option for you, find a mortgage broker in Arizona to get started on the application process. 


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



 You TubeFace Book  Active Rain  Linked In

Arizona Home Loans: How to Qualify for a Home Loan Even if You Have Rotten Credit

If you have bad credit, you can still take advantage of various Arizona home loans products and programs to secure a home mortgage. You can also take certain steps to help clean up your credit to make you a more appealing borrower.

If you have bad credit, you may think that a home mortgage is beyond your reach. The truth is, if you score is 650 or higher you may be able to qualify for a traditional mortgage. If you have a lower FICO score or have been turned away by a bank for a home loan, there are still other lending professionals that will be able to find Arizona home loans that will make it possible for you to purchase a home, even if your credit is less than perfect.

The first and probably most important first step in purchasing a home is to find a qualified Arizona mortgage broker that you trust. A broker is different than a bank in that he can shop for different Arizona home loans that will fit your unique borrowing situation. He is not tied to a specific bank or interest rate and can often find investment groups and lending institutions that are more willing to take a risk on a bad credit borrower.

Once you have found your broker, he should be able to explain a variety of programs that are available for Arizona home loans. If you have good enough credit or a significant amount of cash for a down payment, he may discuss a traditional mortgage with you. He will also discuss various federal loan programs like an FHA loan. The benefit of these types of loans is that they are designed to help out borrowers who may be first time home buyers or have bad credit so the FICO cut off scores are often lower than traditional loans. In addition, there may be programs like “Home in Five” that offer cash back at closing to borrowers who qualify. FHA loans also have low down payments so there is less need to have a significant amount of cash in the bank.

If you do not meet the qualifications for a traditional mortgage or an FHA loan, there are still options that your broker can suggest. Sometimes it makes sense to obtain a loan through an investment group rather than a traditional lending institution like a bank. Investment groups have more leeway in who they qualify for loans and will often offer loans to borrowers with lower FICO scores. Be aware that you will often pay a higher interest rate for these loans because you represent a higher risk for the lenders. However, often this higher rate is worth it to invest in owning a home. Your broker should be able to explain all interest rates and fees, letting you know exactly how much the credit is going to cost you in the long run.

How to Rebuild Your Credit to Qualify for a Arizona Home Loan


             
If you are considering applying for a home mortgage, there are certain steps you can take now to help ensure that you are able to qualify for a loan. First and foremost, make all of your payments
on time. This is especially important for your rent payment. A year of on time rent payments can go a long way in convincing a lender that you will be able to repay a home loan. On time payments of rent, credit cards, student loans, and any other debt you may carry will also help to increase your credit score. A year of on time payments may be the difference between qualifying for a home loan or not.

In addition to rebuilding your credit, make sure that you are also saving money. The bottom line is that money talks, and often louder than a credit score. If you have a year of living expenses saved up this can often outweigh a bad FICO score in terms of loan qualification. Also, a large down payment can decrease your debt to income ratio and make you a more attractive borrower.

A final step to help ensure that you will qualify for the variety of Arizona home loan that are available is to get and keep a job. Having at least a year, if not more, of steady employment with the same employer makes you a much more attractive mortgage candidate. It demonstrates stability which is an attractive trait for mortgage lenders.

Stop letting bad credit hold you back for an Arizona Home Loan.



Find an Arizona mortgage broker to help you navigate the ins and outs of the home buying market today. Make your dream come true and become a homeowner today!

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



 You TubeFace Book  Active Rain  Linked In