How to Evaluate Hard Money Lenders

Selecting hard money lenders is very much like finding any other service provider to work with. The success of your loan and business relationship relies on your due diligence.

It can be very easy to get nervous when you are looking for a lender of any type. After all, you are going to ask this person or institution for money and that just makes most people uncomfortable and nervous. But the key to a successful search for conventional lenders or hard money lenders is remembering that you are their customer and that they are in business to offer you a service. Even if you are seeking a private lender because you have been rejected by a traditional bank, do not rush to accept the first loan offer that you get.

Start your search in the same manner that most of the world uses to find anything, the Internet. Does the lender have a legitimate website? Some websites are simply portals which are gathering information and then sending it off to potential lenders. This is not what you are looking for. A legitimate private lender will have a professional site which will provide you with contact information, general information about the lender, information about the type and size of the loans that they offer and their criteria for lending.

Once you have compiled a list of hard money lenders that you would like to speak to, take an additional step and check them out further. Search to see if they have any litigation pending against them or if there are issues pending with any investors which they might have. In some cases you can also learn what other borrowers have said by doing a google search of each lender. There are numerous sites where consumers report poor service or poor business practices by just about any service provider that you can think of.

As long as you have not uncovered any red flags, then contact each lender to set up an appointment to speak in person or a call if they are not local. At this time it is a good idea to have prepared a list of questions to ask each lender. These answers will allow you to compare each lender on the same criteria. You might ask what type of loans they most often fund or what dollar amount is their average loan. You will also want to inquire about their time frame for funding the request and their criteria for approval of the loan request.

Once you have gathered all of your information, you will want to calculate the total cost of each loan offer. Be sure to consider loan origination or processing fees and any other fees such as an early repayment penalty. This total cost should be your main criteria for selecting any hard money lenders. If you have two lenders who’s offers are the same then you can use more personal characteristics in your decision making process such as who you think will be the easiest to work with or who is located closer for more easy access. But be mindful of cost and the fact that you are going to be the customer.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com 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 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

Pros and Cons of a Bridge Loan (benefits and risks)

There are benefits and risks to obtaining a bridge loan prior to moving out of your old home and into your new dream home. Make sure you understand what they are with these easy tips.

These types of loans are popular for homeowners that are in between moving into their new home and selling their old home. Oftentimes, they could use the extra funds so they can move out of their old home and not miss out on the new home of their dreams because they can’t make a down payment until they send their old home.

Bridge loans are short-term loans that “bridge the gap” between the time you purchase your new home to the time you sell your old home. You can use these funds to finance the new home and them pay the loan off when you sell your old home. The “pros” of these loans are that lenders don’t typically have the strict guidelines that traditional bank loans require. Credit score and debt-to-income ratio are not too important when trying to obtain this loan. What is important are factors such as how likely your current home is to sell quickly, if you are able to pay both mortgage payments if it becomes necessary.

Some other risks of these loans are the fees associated with in including an administration fee, appraisal fee, notary fees, wire fees, origination fees and any other lender fees. All in all these fees can total a few thousand dollars – a lump sum that might be difficult to pay as you are also dealing with other fees associated with your new home. However, the “pro” is that this amount is still much smaller than a large sum of around $20,000 to secure a down payment on your new home if your current home has yet to sell. High interest rates are another downside.

The pros outweigh the cons when it comes to these loans.

There are many pros that make bridge loans very desirable to homeowners looking to upgrade to a new home. Having the ability to avoid trying to sell the house while you are living there is a big bonus! Often times you can get a grace period of a few months before you have to start making payments on the loan, so you may be able to avoid interest payments if you sell you house in that time. The loans are fairly easy to qualify for and they have flexible underwriting guidelines so you can apply and get funding — fast!

You’ll need to go through a mortgage broker or private lender.

When you decide you need a bridge loan to make your home buying and selling process much more smoothly, you’ll need to find a reputable mortgage broker or private lender to help you negotiate the loan approval process. Do your research before you make your decision about who to help you through this process, then go ahead and start shopping for your new dream home!

Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com 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 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

What is a Bridge Loan and Why is it Beneficial?

A bridge loan might be just the think you need to take your dreams of homeownership and turn them into reality, or to purchase a new, larger or upgraded home. Read on to learn the “ins and outs” of these loans, their pros, and cons and how they can help you.

When it comes time to making an educated and informed financial decision about obtaining a loan to by a home or to help you sell your home and buy a new one without too much financial burden, it’s time to learn about how a bridge loan can help. Let’s start by explaining what it is. This is a specialized short-term loan that “bridges the gap” between the time you sell your home to buying your new one. It is very useful when it comes to real estate transactions, as you can apply any equity in your current home as well as the loan itself, toward a down payment on a new home even before your current home is sold. Once sold, you pay back the loan with the funds earned from the sale of the first home.

These loans allow homeowners to not lose out on their new dream house because they have to wait until their current home sells to afford a down payment. It’s also nice to already be out of the current home while your Realtor is selling your home so you don’t have to worry about daily cleanings, leaving the house on show notice due to showings or having the home look “perfect” while also trying to live in it (parents may relate to this benefit…).

Another benefit is that a bridge loan is typically not difficult to apply for or obtain. Because borrowers accept a high debt to income ratio (due to the fact that they own two homes in this time period), debt and credit scores are not scrutinized as they might be with a traditional loan. There is also markedly little paperwork involved in obtaining this type of loan. But keep in mind that you will have to apply for two mortgages during this bridge period as well, so credit score is still important to keep on the up and up.

What you should know before applying for this type of loan.

There are some risks associated with this loan and you should be abreast of the terms prior to signing any official documentation. Downsides include high interest rates. Because the lender is taking a “risk” in extending you the funding for this loan, based on the sale of your current home, as well as the short-term nature of this loan, interest rates are higher. It could even reach 10% or higher. However, some lenders will allow you to skip up to four months of payment on the loan, meaning you could in fact avoid interest rates if you are able to sell your current home and pay off the bridge loan before payments come up. You should also note that there are several fees associated with this type of loan, which in total can run approximately $2,000 or more.

Is this type of loan really worth it?

Depending on your financial situation, your urgency to move out of your current home and secure funding for your new home, yes, it is absolutely worth it. But only you can determine that for yourself based on your needs as a homeowner.

Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com 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 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

How a Bridge Loan Can Help You Get the Home of Your Dreams

If you’re ready to make your American Dream come true by purchasing your first home or if you are ready to sell you current home, a bridge loan can be a very useful way to make this happen. Find out more about how this type of loan can benefit you.

As new homebuyers, it’s crucial to understand that, much like location, timing is everything. Timing is also important in the instance of current homeowners looking to sell their home and buy a new home, as most buyers need the funds from their home sale to put toward their new home purchase. Lining up the exact timing of when you sell your current home to when you sign on you new home is like aligning the stars. But that’s not to say it’s impossible. Challenging yes, but that is why a bridge loan can be just the thing you need to get to the next stage of homeownership regardless of your current status right now.

A bridge loan is a very specialized short-term loan that can help in exactly this instance – when you need funds to get you from “point A to point B” as a homeowner. Even if you are able to qualify for both home loans, you aren’t able to make a significant down payment on the new home without first selling the current home, right? That’s where this loan comes in, because it can serve to “bridge the gap” from that hypothetical point A to point B that we mentioned earlier. It is in addition to your home mortgage and covers a down payment for the new home.

This typically a very short-term scenario, upon which you pay the loan off in its entirety once you receive funds from selling your current home or property. The loan is dependent upon the equity you have build up in your current home. These loans also have low debt-to-income ratios and no specific amount of paperwork requirements at the time of closing. These loans are contingent on the specific financial situation, not based on your annual earnings or your credit score, which comes as a relief to many.

What are some of the benefits of this type of loan?

These loans are very “borrower friendly” and many benefits that serve as win-win solutions for a successful transaction. Without having to have already sold your current home, you can get the new home of your dreams. It also comes in handy to be “out of the house” during the times that real estate professionals are showing the previous home. You can even stage it and possibly put it on the market for a top dollar amount. You can also delay initial payments up to four months on this type of loan so your budget is freed up to manage other expenses that come with selling and buying a home. If you are able to pay back the loan prior to that time, you won’t have to worry about an added monthly payment down the road.

When you decide that you want to obtain a bridge loan, contact a mortgage broker to help you through the process.

Now that you’ve decided that this loan is exactly what you need, its time to find the right mortgage broker to help you through the application process to ensure eligibility and a successful application submission. Do some research about mortgage brokers in your area and meet with several until you find the one you feel confident will work to find you the best loan for a win-win solution.

Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com 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 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

Discovering the Pros and Cons of a Bridge Loan

Bridge loans are there when you need them. However, it’s important to find out the risks, benefits, expectations and pitfalls to make sure its more “dreams come true” than “danger beware.”

In the instance of obtaining an investment property, the market can change abruptly and things happen fast. So when you find the property of your dreams, time is of the essence to create a win-win solution. This is especially true in the case of foreclosures that generally get snapped up very quickly. That is where a commercial bridge loan comes in handy. If your current mortgage is due and you need to secure a replacement mortgage or if you lack the funds needed to finance a balloon payment of a prior loan, this type of loan can also be the answer.

First, let’s define the term bridge loan. What is it, exactly? This type of commercial loan is a particular type of short-term loan that can run the course of as little as two weeks or up to three years. It serves the purpose of being a “quick fix” when funds are needed fast. The term comes from the fact that these loans “bridge the gap” until you can secure long-term funding.

A bridge loan is a fairly straightforward loan, and the process is not too complex or difficult to apply for and get approved, and they typically do not stipulate prepayment penalties. While these loans have many benefits and advantages for business owners that need cash quickly, there are some “cons” of this type of loans so it’s important to understand what those are and if you are prepared to manage those.

It’s important to have realistic expectations about this type of loan.

As with the advantages with this type of loan, there are some stipulations that as the borrower, you need to know and be prepared to handle. One of the biggest drawbacks with this loan is the interest rates are typically higher and more expensive than long-term commercial loans. It’s important to understand the exact terms of this loan, since they can be quite short in length. Typically during the course of this loan, you are seeking a longer-term solution. With that comes the expectation of common practice that when you are able to secure long-term financing, you need to pay off or repay the remainder of the short-term loan in full. This also will alleviate the fact that you are paying a very high interest rate and likely other costs associated with the short-term loan, so it really is a win-win solution to pay off the short-term loan as soon as you secure your loan-term replacement capital.

Don’t be afraid to ask questions about your bridge loan before you sign on the dotted line.

The more educated you are about the definition, terms, “fine print” and payback structure of this type of loan, the more comfortable you can feel about moving forward with securing financing in this manner. Do some research on line and talk to a professional lender about how they can help you secure this type of loan to benefit your business.

Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com 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 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

Bridge Loan

From contractors to developers to small business and home owners, many individuals and companies turn to bridge loans when they are looking for immediate capital. These types of loans are extremely useful in the right circumstance such as when you require a “bridge” from one asset to another and a short-term loan is your best option.

A typical bridge loan is short-term in nature, usually anywhere from 3 to 12 months, though this can be extended in some instances. It can be used for both commercial and residential properties as well as businesses. These asset-based loans give individuals and companies time to secure traditional funding for their projects while allowing them to meet current obligations. If they are bridging from one property to the next, it gives them time to sell the first investment while going ahead with a build-out or renovation. Sometimes, real estate developers and investors will need to take quick action on a property in order to beat out competitors—the perfect opportunity can be realized by obtaining quick capital with this type of loan. In other instances, a developer needs to update a property and prepare it to meet required standards before a traditional lender will consider a long-term loan.

For entrepreneurs, it can bridge the gap that can occur in seasonal businesses. For home owners, it can allow them to purchase and move into their new dream home before their old home has sold. This is important in the hot real estate markets that are occurring today when offers based on a contingent sale can be easily passed over. These types of loans can also be perfect for those in the fix and flip industry who require quick funds in order to get in, renovate and sell.

Hot to Get a Bridge Loan

A private hard money lender often offers this type of loan. They fit well into their portfolio as they are asset-based and short-term. Private investors are, however, not always easy to find. Working with a hard money loan mortgage broker can ensure that you get the best rate from a qualified lender. The requirements to be a licensed mortgage broker are stringent, requiring continuing education to ensure their knowledge base stays relevant. Private investors turn to these businesses and individuals in order to be paired with borrowers that fit into their investment strategy, knowing they can trust them when choosing borrowers. Many businesses, developers and contractors work with a hard money loan mortgage broker that they have come to respect and trust for much of their capital needs. Be sure to check references and work with one that has been in the business for years—it takes time to build up a portfolio of private investors.

We work with hundreds of private investors that look past credit issues and are more concerned with the collateral and the project. We provide quick funding, sometimes in as little as 24 hours, without the mounds of paperwork and endless submissions. Call us today for a no-obligation quote.

Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com 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 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

Bridge Loan

If a business is not in a place financially to obtain funding, but still needs access to funds for a project or for operations, they might apply for a bridge loan. As the name implies, these loans are designed to be very short term and are there to help small businesses with immediate access to funds.

Because of the speed and requirements of traditional lending agencies, there arose a need for funding that was available in a much more condensed time frame with fewer requirements. Bridge loans fill this need. They are not only very flexible, but the terms of the loan are very short, giving both the borrower and the lender exactly what they need.

Typically, small businesses will utilize a bridge loan to cover the expenses that are incurred while they are waiting for the greater funding of a traditional loan to come through. For real estate, this might include the fees, assessment and appraisals of various properties that are in the pipeline for development. These loans allow for the maintenance of cash flow while larger funding is still in process. Some businesses have used these loans to cover rent, payroll or other operations expenses to maintain their operations while other funding is pending.

The ease of accessibility of these loans does not come without a cost, however, as the interest rates are typically much larger than that of a traditional loan. This only makes sense when you consider the level of risk that a lender is undertaking by providing the funding in such a matter. There is not much security outside of the value of the property. In this way, bridge loans are very similar to hard money loans, although their intended purpose is different.

One of the strategies that many borrowers employ is actually to roll the cost of the bridge loan into the overall cost of the larger traditional loan. This allows the borrower to pay back the loan immediately upon the receipt of the larger loan. This, essentially, rolls both loans into one payment and is a fairly standard tactic. Most lenders understand the need to do that and are willing to work with borrowers to ensure a smooth transition. If you are a borrower that is in bind while waiting for funding, make sure that you explore all of the options that are available to you. Your lender might even have some ideas about how you can creative leverage these loans.

Are there any other uses for a bridge loan other than real estate?

Yes, absolutely. Many operating businesses use bridge loans to cover the operational costs of doing business while they are waiting on large contracts or massive amounts of funding. While this could be a risky venture if financing falls through, it is a safe assumption that businesses who are going to use the quick funds of a loan of this type can count on their source of funding to not fail. At this point, the elevated interest payments are a much more acceptable loss than having to shut down operations.

Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com 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 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

How a Bridge Loan can Work for You

Understanding how a bridge loan works can afford you a great opportunity to buy a new home. But you need to understand the risk involved before you chose this option.

Not everything goes according to your plans no matter how diligently you might work to ensure that it does. There are just some events that are out of your control. And this can certainly be the case when you are selling your current home and searching for a new home. Nothing is more frustrating than finding your next perfect home before you are able to sell your current home. In some cases you can make an offer with a contingency but other times the seller has multiple offers and you are faced with making an offer or losing the house. Your only solution could be a bridge loan, which is a temporary loan that is secured by your existing home to fund the down payment on your new home.

When you are in a position that requires a bridge loan, the bank will need to see documentation on your current mortgage and your income to determine if you qualify. There are not really any specific standards to qualify for a bridge loan as each case can be drastically different. Most lenders take a more real life approach to evaluating your ability to pay both mortgages at the same time because it is likely that you will not sell your first home before the mortgage payment is due on your new home.

As with any type of loan, there are pros and cons to a these loans. It is certainly a benefit to be able to close on a new home prior to selling your current home. Also, you might be able to negotiate terms with your lender so that the first payment on your short term loan is not due for several months. This can give you time to sell your current home without making multiple mortgage payments each month.

The Drawbacks

Any short term loan is going to have a higher interest rate than a long term loan so expect that as well as additional fees when you are talking to lenders about a loan to bridge your two mortgages. Also, if your income is not substantial, it could be difficult to qualify for a second loan. So before you head down the path of two mortgage payments, even for just a few months, be certain that you have the monthly income or savings to cover both payments. The very real truth is that you do not know when your first home will sell and therefore how long you will need to pay both loans each month.

Understand the Cost and the Risk

Knowing that you could be paying somewhat high fees and interest as well as two mortgage payments each month can add a lot of stress to your finances. Be certain that you understand the repayment time frame of your short term loan before you commit to the lender. Also, be very realistic when you estimate how long it could take your current home to sell. If you have no interest or offers then it could be wise to pass on the new home until your current home sells. Using a bridge loan correctly can be a great benefit but used improperly it can also be a huge disaster.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com 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 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

Bridge Loan Basics

Selling a home to fund the purchase of a new home is stressful. But using a bridge loan can take a difficult situation and make it manageable for a short time.

Timing is everything when you are trying to sell your home and purchase a new one. But unfortunately the timing that you want does not always materialize for you. Having a full price or close to full price offer on your current home can make it much easier to decide to make an offer on the home you want for the future. But what do you do when you find your perfect next home before you get a decent offer on your current home? Some say you should pass on the new home but many will recommend that you use a bridge loan to finance your down payment until your current home sells.

When you are getting a bridge loan to cover the down payment on your next home, your current home is the security or collateral for the bridge loan. So this means that there is some risk involved if your current home does not sell. In short you could be faced with making two mortgage payments each month as well as the payment on the short term loan. For this reason you need to be very careful about the amount of debt that you are taking on and also very realistic about how long it could take to sell your current home. Not only are you risking both your current and new home but your credit score if you are forced to default on any of these loans. And you could even be left with no place to live.

A Solid Option for Many Buyers

But don’t look at a bridge loan as some evil entity that could cost you everything that you have worked your entire life to achieve. There are some advantages to using this short term loan. First, it lets you secure that perfect home before someone else buys it. You are then free to move in and enjoy the new house while you continue to market your first home. It is also beneficial to use a short term loan, such as a bridge, to make your offer more appealing to the seller. Many offers are contingent on another home selling and that is less appealing for other sellers. An offer with no contingencies might even be accepted at a lower offer price than a larger offer but which includes stipulations or contingencies.

Know Your Options and the Potential Downfalls

As with any financial decision, having as much information as possible is critical to making a wise choice. If you are thinking about taking a short term loan to make a down payment on your new home then consider all of the potential outcomes. Speak candidly to your listing agent to learn his or her estimate for selling your current home. Also look at comps in your area to see how quickly homes like yours are selling. Only sign a loan document once you are certain that you home will sell in a reasonable time frame and for a price that will cover your down payment.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com 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 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

How to Buy and Sell a House With an Arizona Bridge Loan

When you are needing to move, buying a new home while selling your existing home can be a stressful and complicated process.  A Short term Arizona bridge loan 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. An Arizona Bridge loan is 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. An Arizona Bridge Loan has 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  An Arizona Bridge Loan

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 de-cluttered 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.

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

Bridge loans can help you find and buy “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.

Call our office today to learn more about how bridge loans can help make your dreams come true!

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
dennis@level4funding.com
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120 | 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 38 years. They have 2 beautiful daughters 4 amazing grandchildren. Dennis has been an Arizona resident for the past 32 years.