Learn To Be A Fix & Flip Investor: fixing your credit

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Wednesday, May 23, 2018

What Are Hard Money Loans Arizona?

Understanding hard money loans Arizona will provide investors with an additional lending resource when they are interested in investing in real estate. It will also greatly reduce the time involved in securing funding.

Hard money loans Arizona are just loans that is secured by real estate. In addition, these loans are funded by private investors or lenders instead of the traditional banks or loan companies. In most cases, the loan is short term such as a 12 month time frame or even as short as three or six months. But the term can be extended to as long as two to five years. Another term used for this type of loan is asset based lending.

The terms of hard money loans Arizona are flexible because the lender is not obligated to follow the same rules and restrictions that traditional lending institutions must follow. The private lender is able to work more closely with the borrower to create terms that are mutually beneficial to both parties. For this reason, many borrowers prefer hard money loans Arizona over traditional loans.

In addition to being flexible with the repayment terms of hard money loans, borrowers also like the fact that it is much easier to qualify for a hard money loan than a traditional loan. Instead of the lender reviewing the borrowers credit, income and current debt load, the lender is really only interested in the current value of the property that is going to be used as collateral for the loan. This allows borrowers with no credit or poor credit to still be able to qualify for the hard money loan.

Deals the Could Require Hard Money Loans

Hard money loans are not the perfect solution for any type of deal. They are financed at a higher rate than a traditional loan and also can have additional loan fees which are charged to the borrower. In most cases, if a borrower can get a traditional loan, then that is the best solution. But when banks are not willing to fund a loan request then hard money is a viable option. Deals such as a short term fix and flip, land loans, construction loans and deals that have a very short time frame for funding are all prime examples of the perfect reason to select a hard money loan.

Properties to Secure a Hard Money Loan

A borrower can use just about any type of property to secure a hard money loan. The only qualification for a property is that the lender be willing to accept that type of property as collateral. Often times a lender would prefer a single family home as collateral because it has a more stable market value and is easier to liquidate if the borrower defaults. But multi-family residential, commercial, industrial and even unimproved land can all be used to secure a hard money loan.

Understanding how a hard money loan works and when it is beneficial, offers borrowers a legitimate option for funding when a traditional lender has declines a loan application.

Friday, April 27, 2018

How to Qualify for a Spec Construction Loan

First-time real estate investors could find spec construction loans a challenge to qualify for and very complicated. Get a sense for how construction loans are different from conventional mortgages and some strategies to maximize your chance of qualifying.

Construction loans differ from ordinary commercial loans in a variety of ways. They are more complicated than regular mortgages and funding is given according to a specific timetable. An initial amount of funding will be given to the borrower, and then the remainder of the loan will be dispersed on a monthly basis, or at the borrower's request. Most lenders will require verification of a borrower's expenses over the course of a construction project, which can create complications.

Construction loans are especially tricky to qualify for and are considered too risky by most banks. Most lenders have difficulty underwriting construction loans because they have to rely on the borrower's assumptions about the cost and profitability of a given project. Most lenders are especially wary of spec loans and consider them too risky because there is no guarantee of a future sale.

A spec loan is usually given on a short-term basis and is not meant to be a long-term mortgage. The aim of the borrower is to sell the property quickly after construction is completed. It is crucial that potential borrowers can demonstrate their expertise in order to qualify for a spec loan.

If you can talk up your expertise to increase your chances of qualifying for a spec construction loan

Your financial projections are what a spec lender will rely on to underwrite your loan and so it is essential to demonstrate your expertise. If a lender doesn't have faith that you will finish a project, or that you will earn a profit in the end, in most cases your construction loan won't be approved.

The best way to qualify for a spec loan is to give any potential lender confidence in your knowledge and experience when it comes to real estate. But there are additional strategies you can employ as well.

Specific tactics to help you qualify for a spec construction loan

Seek out lenders located near your construction site. A local lender will have an emotional investment in the area and will have a better understanding of your project's potential. Ensure you have enough capital up-front to make a sufficient down payment. Lenders will want an assurance that you have a sufficient stake in your construction project. The risk entailed by a spec loan usually entails a significant down payment.

Have a detailed understanding of your builders draw-process, meaning know how much your builder intends to spend at every step of your project and be sure this schedule matches the structure of your loan.

In short to qualify for a spec loan, demonstrate your expertise, find local lenders, have sufficient cash on hand and know your projects timetable. By employing these strategies, you maximize the chances of your spec loan getting approved.

Monday, May 23, 2016

How you can fix your credit score.

How do you Fix Your Credit Score?

You want that Arizona Home Mortgage to purchase our dream home but your credit score is low. Your credit score is an indication of what the industry calls your willingness and ability to pay debt. It's a probability ranking score on the possibility of you defaulting on an Arizona Home Mortgage payment obligation in the next 90 days. Some people like to think of it as a credit score grade on your payment performance. The lender will look at your overall grade and see if you are:

1. willing to pay, based on your history

2. able to pay the debt, based on your income

3. capable to pay, based on how many loans you have.

If you have a failing credit grade (an F), then the lender will assume that you are going to fail again and not pay them back. It's an overall Grade Point Average on how you passed or failed on prior Mortgage obligations. If you got an F on an Arizona Home Mortgage in the past your Grade Point Average is going to go down. Think of it as when you were in school. Every year the school would give you a Grade Point Average for the years’ work. Some people got a very high Grade Point Average (all A's) and were the smart kids in school, while others got a few D's and F's on their report card and had a lower Grade Point Average for the year. This school of credit never ends in your life and you want to have the highest credit score Grade Point Average as possible, and keep it up through your life. So what do you do to get a high credit score Grade Point Average? You do the same thing that you did in school. That is:

1. Take the Test over again and get a better grade. How do you do this? You pay back the people you owe money to. Those items in collection or past due need to be paid off and settled. The grade on your past due Mortgage is currently an F, but you can make it a C+ if you pay off the debt.

2. Don't get any more F's on your work. This means that you pay the Mortgages back and on time. You need to take it seriously, and make the payments and don't be late. Remember when you turned work in late in school and the teacher deducted points for the work because you were late? It's the same in the credit school; don't be late on your work. Also, what type of grade were you given when you did not turn in the work at all? You would get an F. This is the same with paying Mortgages, when you DON'T PAY then you get an F and your overall credit score Grade Point Average goes way down. Pay your Mortgages on time and full will give you the best Grade Point Average.

3. Don't take on too may classes. If you take a safe load of classes, then your work load is easier and you can probably get an A in every class. But if you take on too many classes, you will not be able to get all the work done for all the classes. This is the same in the credit world. Don't take on too many Mortgages and keep the balance owed on the Mortgage to around 30% of your available balance. The lender will look at your Mortgage load (class load) and think are you never going to get the work done? You have maxed out all of your credit cards and want another one? The more Mortgages you take on (sign up for) the higher the chance that you are going to fail on one of them and possibly the Mortgage you are now trying to get is the one you will fail on.

4. Get that bad score off your report. Usually the quickest way to get a bad grade off your report is to dispute the score (Whine to the teacher). Tell the credit bureaus that it's not your grade or that the grader who graded the test was wrong, or that they used the wrong pencil or that they used the wrong answer sheet to grade your work. If you can get an F off your report card, your overall score and Grade Point Average will go up. This is usually the first thing you can do to get a better Grade Point Average. You do this by disputing the items on your credit report for each of the credit bureaus. If they believe you and you are able to get the score off your credit report your Grade Point Average will go up. If credit bureaus don't believe you, then work on step 1-3 above.

The good part about the credit score Grade Point Average is it is an Average. It's calculated over time and time is your friend when you calculate the Grade Point Average. Your overall score is based on the current work and the work you have done in the past, but usually it's for the last 3-5 years and if you have an F on your credit score report card, it will drop off in a few years. So if you keep your grades up, in a couple of years your credit score Grade Point Average starts to improve and eventually you will have all A's and you can qualify for the Arizona Home Mortgage.

So you have bad credit and want an Arizona Home Mortgage? What are the exact steps?

I recommended that you read the book Credit Bible - Everything You'll Ever Want To Know About Credit by Phil Turner. This is a detailed book on the steps and mistakes you can do to fix your credit score.

Arizona Private Hard Money Lender

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
26601 N 19^th Ave Suite 112
Phoenix AZ 85027

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