Arizona hard money lenders go where banks won’t

There are few things more disheartening than financial troubles. Worst case scenario is when you find yourself in a hole you know you can’t get out of. You may have had a difficult financial past, but that doesn’t necessarily predict your financial future. If you need a quick loan for a home or project and your bank or other money lending companies will not approve you, you can almost always count on an Arizona hard money lender.

Arizona hard money lenders take a significant risk in loaning their money out to borrowers. Not only do they loan the money to a complete stranger, they do not base the loan on your credit, income, employment history, or ability to pay. Hard money loans are strictly equity-based and they use the home you are purchasing as collateral in order to ensure repayment. Arizona hard money lenders will loan to YOU, and they can get you your money in a matter of 24 hours.

Arizona hard money lenders are on your side

Like stated previously, Arizona hard money lenders will go where banks wouldn’t even consider. Obviously, they are you, the borrower’s, side. They want to help you out and will be willing to do so if they can see that your investment or project would be profitable in some home. Most Arizona hard money lenders loan money for buying a foreclosed or short saled home, fix-and-flip projects, and other types of property or real estate investments. Needless to say, you can’t exactly go buy a new ferrari with hard money, but you can certainly put the money toward the home of your dreams.

Most hard money loans have a little higher interest rates than traditional loans. This is because, as mentioned before, Arizona hard money lenders are taking a bit bigger risk by loaning to you without first checking your credit or other components of your financial history. However, these loans are typically shorter than other loans (around 3-36 months) so that higher interest rate does not add up quite as quickly. Remember that Arizona hard money lenders will often approve you for a loan of up to 80% of the property’s value (though this number is usually closer to 60%) in as little as 24 hours.

Quick Answers to your Arizona hard money questions.

If you’re thinking about an Arizona hard money loan, you undoubtedly have questions. Listed below are seven quick questions with seven quick answers to help you understand a little bit more about Arizona hard money.

Five Arizona hard money questions and answers

1. What is the interest rate on an Arizona hard money loan?

This question depends on the lender. No two lenders are alike and will base their interest rates on a variety of factors. However, most interest rates on hard money loans will range from 10% to 18%.

2. What Loan-to-Value are lenders seeking?

Arizona hard money lenders, again, will base this number based on quite a few factors. Most of the time, the LTV will be about 70% of the after-repaired value. However, this number can range anywhere from 65% to 80%.

3. What are the costs of Arizona hard money loans?

All hard money loans are going to require a Title policy, insurance, and appraisal. These services do cost money--even up to a couple thousand dollars. Often times though, this will only cost a few hundred dollars.

4. Does my credit matter?

Yes and no. Your eligibility is not determined on credit, so having bad credit doesn’t hurt you too much. However, if you have decent credit, it can establish your credibility and ensure the lender of your ability to repay. However, the loan is based on the value of the property in the end. Many people seek hard money loans mainly because of their poor credit and inability to receive a lower-interest rate loan from the bank.

5. Do I have to put money down?

Yes, most of the time. Lenders want to feel confident in their investment, so they need to see that you have enough resources to cover the costs of the loan. Expect to pay a little bit out of pocket until the project is completed.

What Matters (and what doesn’t) in Arizona Hard Money Loans

First and foremost, what matters is that you need to be approved for a loan quickly and easily. That’s the good news. Fortunately for you, there is much more good news that comes when dealing with Arizona hard money loans. You need to do your research and find the right hard money lender for you. Obviously, you want to find one with low interest rates and a quick approval time, but that’s not all that matters in Arizona hard money loans.

It’s good to know that hard money loans are equity based and are usually approved for an amount somewhere between 60% and 85% of the value of the home property. This is a significant amount of the mortgage and can help you greatly if you cannot get approved by another lender. Arizona hard money loans are typically short-term, ranging from 6-36 months, so that’s important to know too.

It matters that you are professional and truly striving to make the payments of a hard money loan. Lenders are taking a significant risk in loaning the money to you because they are only basing their decision on the value of the home.You need to do all that you can to show them you value their business and are willing to hold up your end of the agreement.

What doesn’t matter in an Arizona hard money loan

There are other benefits for you in an Arizona hard money loan. If you have had trouble getting approved for a loan in the past, it could be due to your inability to pay or prove that you can handle the responsibility. However, if you have turned things around and are ready to take on another financial obligation, you can get approved for an Arizona hard money loan quite easily. Lenders do not check your pay stubs, tax information, or even your credit.

So basically, it is quite easy to get approved. If a lender can see that your home or project is worthy of investing in, they will approve you for a loan. Remember though that when you purchase your home, it is then used as collateral for the lender and can be used against you if you do not make your payments.

There are pros and cons in the hard money lending industry, as in any other industry involving money. You might find that interest rates are high, but that eligibility is easy. The approval time for an Arizona hard money loan is usually around 24 hours, so the money comes quickly. If you are looking for a way to fund your next home purchase or project, hard money lending could be right for you.

The Truth about Arizona Hard Money Lenders

Many first time investors are curious about hard money  loans. What do these loan companies do? Who are they? Where does the money come from? These are all common questions coming from those with little to no experience with the hard money industry. Let me enlighten you on what Arizona hard money lenders do and a little bit about how they work.

The term “hard money” is important to understand. Clearly the opposite of what investors call “soft money” (that referring to loans that are easier to qualify for and are more flexible), hard money is a little more restrictive. This makes perfect sense because most hard money loans come from private Arizona hard money lenders and are not based on credit or ability to pay so the risk is much greater. This money does not come from a bank or typical lending institution, but rather from a private investor with extra money on hand.

Things to know about Arizona Hard Money Lenders

First, know that Arizona hard money lenders are on your side. They understand that a difficult financial past can damage your qualifying power but should not keep you from pursuing your dreams. That’s why they don’t check your credit, ask you to provide pay stubs, or investigate your financial history. The loans are completely equity-based, so they have less to do with you than you think.

Most Arizona hard money lenders will loan you anywhere from 60% to 85% of the value of the property or home you are looking into buying.  Typically these loans tend to be on the short side (about 6 to 36 months) and have higher interest rates than most loans. The interest varies according to your credit score and experience.

Do your research before deciding which Arizona hard money lender to pursue. Compare and contrast the interest rates, loan lengths, etc. so that you find the deal that is right for you. The most important thing to keep in mind is that you not ask more than necessary and that you have some sort of repayment plan in place.

Why Choose an Arizona Hard Money Loan over a Traditional Loan?

Some people might think opting for a hard money loan over a traditional loan is a crazy decision to make. With higher interest rates and shorter loan lengths, why on earth would anyone make this decision?

There are many misconceptions about Arizona hard money loans. (A few of which are stated above.) There are also many reasons why hard money loans are a legitimate option for borrowers. Most of the time, borrowers who choose Arizona hard money loans simply cannot meet the compliance requirements of their bank’s or traditional lender’s guidelines. Sometimes when the only option you can qualify for is a hard money loan, you must proceed.

Another plus to Arizona hard money loans is that they are much more prompt than other lenders. In fact, a loan can often be approved and funded all in a day’s work. Many other lenders can take up to two weeks to process and approve the loan. That can be a long time to wait to possibly hear bad news.

What can Arizona hard money loans be used for?

There are a variety of uses for Arizona hard money loans. Another misconception about hard money is that it can only be used for home purchases such as short sales. However, that is not always the case. Funds from an approved Arizona hard money loan can also be used for fix-and-flip projects, property development, foreclosure bailouts, debt consolidation, probate resolutions, etc. The possibilities are practically endless with this type of money lending and exchange!

Before deciding which hard money lender is right for you, be sure to do your research! Compare and contrast several companies before making your final decision and go with what feels right. Obviously, this is a professional agreement, so you need to make sure  the company you choose has the highest level of professionalism.

Qualifying for an Arizona Hard Money Loan

You probably have some financial experience or at least some knowledge of traditional financing. If all you know is that getting approved for a loan is difficult, then you know enough. If you know that you have poor credit, you may not have even attempted to apply for a loan in the past. However, Arizona hard money loans could be the answer to your problems.

With Arizona hard money loans, you don’t have to worry so much about your personal financial profile--things such as credit, income, employment history, and ability to pay don’t have much to do with it. Arizona hard money loans are equity-based, so it’s more about the property than it is about you.

What Arizona Hard Money Lenders Consider

The first and biggest thing lenders consider is the equity of the property. Is it worth it? Or is your investment project not going to lend any positive results? Lenders consider the LTV (loan to value) ratio between the amount you want to borrow and the value of the property. In this case, make certain you are not asking to borrow an outrageous amount of money for a home that isn’t worth much. For the most part, Arizona hard money loans are usually between 65% and 80% of the value of the property.

Another factor lenders consider is previous liens. Do you have any other liens on the property? If so, you may not get approved for a loan. Hard money lenders will not agree to loan money on a secondary basis. They must be the PRIMARY lienholder. f

As stated before, qualifying for Arizona hard money does not mean that you have to have good credit or a high income. In fact, one of the main reasons people seek out hard money loans is that they do not have the credit or income necessary to qualify for a loan from the bank or other financial institutions.

Overall, Arizona hard money loans are less restrictive than traditional loans. There is less turnaround time, no need to provide proof of income, and you get to work out the plan personally with your investor or hard money company. Many people find that Arizona hard money loans are viable and trustworthy places to get the money they need quickly and easily.

Types of Arizona Hard Money

There are lots of ways to make Arizona hard money work for you. While most people think of hard money loans as those high-interest, last-resort, type of money options, they can actually be used creatively and efficiently so that the lender and the borrower both end up profiting in the end. How can this be done, you ask? Read on to find ways to make Arizona hard money fit your circumstance!

Arizona Hard Money can be used in diverse situations.

The first and most common example of Arizona hard money loans is a residential investment loan. This is for a personalized and individual situation (not commercial) and the property is used as collateral. This type of loan, or any hard money loan for that matter, is not based on personal finances or income, but rather on the value of the property.

The second type of Arizona hard money is for commercial investments. This is for companies looking to invest in property or in a “fix-and-flip” project. In this case, your company might not have ownership of other property to use as collateral, so instead, they may accept interest in your company. Basically, the Arizona hard money lender would be a part-owner of the business.

Once again referring to the “fix-and-flip” type projects, Arizona hard money can be used for this type of situation. Basically, the hard money lender would give you a short loan (6-36 months) that you could  use while you are revamping the property. Then, you can turn around and sell the property you renovated for more than you bought it for, pay your loan off, and make a profit. This is a new and creative way borrowers are utilizing the services of Arizona hard money. In fact, in this instance, 3 people are benefitting: the lender, the borrower/project person, and the buyer of the home who just purchased a completely revamped and fabulous home or property.

These are only three ways you can make Arizona hard money work for you. The possibilities are endless! And, since each situation is completely unique, hard money consultants and companies can walk you through the process and help you explore your options.