Learn To Be A Fix & Flip Investor: Arizona home mortgages for bad credit

Showing posts with label Arizona home mortgages for bad credit. Show all posts

Sunday, April 29, 2018

How to find the right hard money lender for your next project

Just because you cant secure a traditional bank loan doesn't mean you don't have other options, you may have considered a hard money lender but where do you start? What should you expect from a potential lender, and what will a lender expect from you?

A quick google search for private lenders should turn up an endless array of financing options. Because you might need a specific type of lender to match your particular project an online search can prove to be a little overwhelming. You could always try to be more exact with your search terms, trying things like ‘private rehab loans,' or ‘private construction loans.' Being specific with your online searches may help you find the lender that is right for you, but this isn't always the case.

Consider using one numerous lender databases available online to narrow down your financing options. The ideal database would allow you to aim your search for lenders based on the amount of financing you need or will enable you to search for lenders based on your specific project, (i.e., Renovation, construction, commercial, etc).

If you'd rather avoid the hassle of searching for a lender on your own, you could seek out a referral from a licensed mortgage broker. Local real estate investment groups could also put you in touch with lenders they have worked with in the past.

If you find the right lender, the question then becomes what should expect from them and how do you know you're getting the best possible deal.

What should you expect from a potential hard money lender during the application process?

Search relevant government databases to ensure your lender is licensed. Your lender should also be transparent throughout the process. Ensure that they meet their published guidelines related to fees and closing costs. You should also be wary of teaser rates offered by unscrupulous lenders.

Know that every private lender is different and will have their criteria when it comes what they expect from you as a borrower.Ask your lender to be transparent about any documentation you might need throughout the loan application process.

Know what your hard money lender expects from you to get the best deal possible

This type of loan is often used to finance rehabilitation and construction projects.If your seeking financing for renovation or construction, a lender will want to ensure that you are competent and knowledgeable about your project. In these cases, before approaching any lender, have details about the property you wish to purchase, a budget for your renovations and thorough projections about the future profitability of your project. You build up your lenders confidence and gain room to negotiate by demonstrating your understanding of a project's potential.

You need to have a detailed understanding of what your property is worth to qualify for the best possible loan. A private lender usually bases the amount of financing offered on the market value of the property you are purchasing. You won't qualify the largest possible loan if you don't have a good sense of what your property is worth.

Sunday, March 25, 2018

Tactics for refinancing your commercial loan

When it comes to refinancing commercial loans, you naturally want to qualify for the largest loan with the best terms. Learn some strategies to help you refinance your commercial mortgage

Once your commercial mortgage matures, why should you refinance, rather than selling the property? Refinancing can improve your monthly cash flow and if your property has appreciated in value, refinancing will enable you to pull out additional equity tax-free.

There are some significant differences when comes to refinancing commercial real estate. A Residential mortgage is usually fully amortized and can have terms of up to 30 years. Commercial mortgages have shorter lifespans of 5 to 10 years, and commercial borrowers typically need to refinance their mortgages on a regular basis. But The biggest difference between commercial and residential refinancing is the impact of net operating income on commercial property values.

Improve the income you receive from commercial property to improve the terms of your commercial loan

Net operating income has a considerable impact on commercial real estate values.

The value of commercial property increases if it can generate more income, regardless of property values in the immediate area.

Before refinancing the best strategy is to increase the amount of income your property generates. By maximizing the profit you receive from a property, you increase its value and can refinance to a larger mortgage with better terms. Some strategies to maximize cash flow could include improving the number or quality of your tenants or using renovations to raise rents.

Other things to consider when it comes refinancing you commercial loan

Always seek counsel about your strategy and your specific situation, but the following tactics should help you get the best loan at the best terms.

Use refinancing as a way to reposition your investment strategy or even expand your portfolio. The additional funds you get from refinancing can be used to repay your initial loan, any initial investors, or could be used to improve the property itself. Better yet you can use the additional funds from refinancing to purchase another piece of commercial property. Therefore refinancing can be used as a strategy to expand your investment portfolio and earn more money on a monthly basis.

Refinancing in all cases should improve your monthly cash flow. Refinancing to a loan with higher monthly payments and less favorable terms is of course not a good idea. Refinancing should entail lower monthly payments or should allow you to cash out any additional equity from your investment property.

Strategize to qualify for the best loan with the best terms. Know when your current loan matures and invest in the property accordingly. Over the duration of your loan ensure the condition of your property does not deteriorate. Better yet take consistent steps to improve your property over the term of your mortgage.

You should also aim for full occupancy before refinancing. Most lenders will offer favorable terms on properties with 90 percent occupancy over a period of 90 days. Losing tenants will drastically reduce the income from the property and therefore reduce its value.

In the end, the crux of refinancing a commercial loan is to optimize the profits a property can generate which will enable you to refinance at the best terms.

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

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.