Quick Answers to Quick Arizona Hard Money Questions

Anytime your money is involved you need to know the answers to ALL of your questions. This is especially true with Arizona hard money. If you’re thinking about an Arizona hard money loan, you need to gather as much information as possible. Listed below are a few FAQs to Arizona hard money loans.

Arizona hard money FAQs

1. How do I get approval for an Arizona hard money loan?

Getting approved is easy! Lenders don’t base your eligibility on credit score, employment history, or current income. In fact, you don’t even have to provide any financial information. All your lender needs to know are the logistics of your property. Hard money loans are strictly equity-based, so you have quite a bit of leeway when it comes to eligibility.

2. What LTV (Loan to Value) ratio can I expect?

This number will be based on quite a few factors and determined on a case-by-case basis. However, as a general rule, most LTVS will be anywhere from 65% to 80% of the value of the home. This number can fluctuate greatly, but this is a good base to go off of.

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. Most hard money lenders will not charge application fees or closing costs, so, by the time you even find the lender you want to use, most of the expenses have already been taken care of.

4. Do I have to put money down?

Most of the time, you do. Lenders need 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, but nothing that will break the deal.

Arizona hard money eligibility

If all you know about financial lending institutions and the finance world is that getting a loan is difficult--and perhaps, not in your near future--you know enough. That’s OK, too. The majority of people actually don’t know much about loans and borrowing money and they don’t bother to find out information on them until they need one. If you already know you cannot qualify for a loan, or if you have been declined financing for your home purchase, an Arizona hard money loan could be just right for you.

Getting approved for an Arizona hard money loan is really simple. With Arizona hard money loans, you don’t have to worry so much about your personal financial profile. In fact, things such as credit, income, employment history, and ability to pay don’t have much to do with it. These types of loans are equity-based, so it’s more about the property than anything else.

Considerations in the Arizona hard money world

The first and most important thing lenders consider is the equity of the property. Is it worth it? Or is your investment project just going to turn into a hot mess? Hard money lenders consider the LTV (loan to value) ratio between the amount you want to borrow and the value of the property. For you, this usually means approval of a loan for an amount between 65% and 80% of the home value. I

Do you have any other liens on the property? Hard money lenders take into account if you have any other previous liens. 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. Still, this is always worth checking into.

One of the main reasons people seek hard money loans is because they do not have the credit or income level necessary to qualify for a loan from banks or other lending institutions. So, as stated before, qualifying for Arizona hard money does not mean that you have to have a good financial past. Again, these loans are equity-based. (Although, good credit can never hurt a person.)

Overall, Arizona hard money loans are less restrictive and easier to qualify for than other loans. One of the great things about these types of loans is that you get to work out the logistics of it personally with your investor or lending company. Many people find that Arizona hard money loans are viable and trustworthy places to get the money they need quickly and easily.

How Arizona hard money can be borrowed and used

The first and most common example of Arizona hard money loans is a residential investment loan. This is for an individual person seeking a loan and the property purchased with the money is then used as collateral. Fortunately for the buyer, this eligibility for this loan is determined on the property, not on the borrower’s ability to pay.

Next, we have Arizona hard money for commercial investments. This is for companies (small or large) looking to invest in property or in a “fix-and-flip” project. (This can also be done as an individual, but is a little less common.) In the residential 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, at least until the project is completed and the money has been paid back to the lender.

Most Arizona hard money loans are a bit shorter loans--about 6-36 months. When done correctly, both the lender and the borrower can actually profit. After you have revamped the property you purchased, you can turn around and sell the property for more than what you paid for it. Then, you pay off your loan, make the homebuyer happy, and you have a little extra cash in your pocket. If you play your cards right, you can actually turn this into a profitable income for yourself.

The possibilities are endless with Arizona hard money!

How do I find the right Arizona hard money lender?

Finding an Arizona hard money lender can seem like a daunting task. In fact, you may be so deep in financial hardship, it’s taking all of your strength just to keep your head above water. When you don’t have anywhere to turn, Arizona hard money lenders are there for you. After you find the right hard money lender for you, they can loan you the money you need in as little as 24 hours and set you on the path to financial freedom. There are a few ways to find the right Arizona hard money lender and it is on you to make sure you find the right one for your needs.

First, you need to determine the kind of hard money you are seeking. Are you a commercial developer in need of hard money? Or are you an individual interested in a residential hard money loan? Deciding which category you belong to is the first step to consider before looking further.

Then, crunch the numbers and configure how much money you need. Remember that Arizona hard money lenders will loan you up to 80% LTV (loan to value), but this amount could also be as low as 65%. Keep your number somewhere between that range and then start doing your research. You probably already have your purchase in mind, so do the math. How much can you afford? How much do you need to borrow? What can you do to minimize costs?

Researching an Arizona hard money lender

What better way to start than with everyone’s favorite research tool? You don’t even have to get off the couch--start with the internet. Use a search engine such as Google or Bing and type in the words you are looking to find. For example, if you wanted to find a lender in your area, you may type “Arizona hard money lenders.” Undoubtedly, several hundred (if not thousand) websites are going to pop up. This can also be daunting. Click on some of the sites and compare and contrast what you see. Make a few lists of the things that seem legitimate to you and also keep a list of lenders that seem a little sketchy. It isn’t too much to ask to have your hard money lender at least have a legitimate looking website if they are going to be dealing with your finances.

One of the most important things to remember is that if it seems too good to be true, IT IS! Don’t do anything you feel uncomfortable with, even if it seems like a good deal. Trust that gut feeling of yours, even if it means the lender you decide on has slightly higher interest rates. Don’t let your vulnerable situation lead you down a path that you feel to be wrong.

When you find a decent looking lender, look up some customer reviews. You can learn about a lender by simply reading what other people’s experiences have been like with them.

The different types of Arizona Hard Money available in your area.

There are lots of ways to make Arizona hard money work for you. The most common situation is a person seeking a loan to purchase a home who cannot get approved for a loan by a traditional lending agency like a bank. While most people think of Arizona 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. Believe it or not, it can be done!

Arizona hard money lenders as a help to the economy

Not a soul in America would be surprised to hear about the troubled economy. In fact, our nation’s financial burdens are so abundant that almost nothing surprises us--we have become desensitized to this kind of material. We all know the government is in trouble, we know our neighbor is in trouble, our distant relatives maybe--but what happens when YOU are the one in a financial hardship?

Between home repairs, medical bills, children and family needs, grocery bills, cell phone, tv, internet, and unexpected costs, there never seems to be enough money to go around. An unexpected job loss or pay cut can devastate a family that is just barely getting by. If this situation sounds anything like yours, it might be time to consider finding an Arizona hard money lender.

How Arizona hard money lenders solve these problems

Unfortunately, banks don’t take a personal interest in their clients. If you can’t pay, you don’t get a loan. It’s as simple as that. Your ability to pay is based on your credit, income, employment history, and the like--not on your integrity or how hard you are working. All this denial by bank has created a ripe market for Arizona hard money lenders.

How on earth would people who are in the business of debt stimulate the economy? Crazy, right? Here’s how: Arizona hard money lenders stimulate the economy by lending to individuals when other lending institutions and banks won’t. Obviously, the lending process alone does not directly stimulate the economy. It must go one step further than that. When borrowers receive hard money, they normally spend the funds on the goods and services required for fixing up their new home purchase. These goods and services are often bought in their hometown and provide business for  small companies. This creates commerce for all parties and manufacturers involved in the process, whether directly or indirectly. Make sense?

If you have the funds to become an Arizona hard money lender, contact a hard money institution today. Then, you can loan your money to borrowers who need it and sit back and watch your money grow...you don’t even have to move a finger! If you are on the other end of the table and are looking to be approved by an Arizona hard money lender, look no further. With no proof of income required, no application fees or closing costs, and little wait time, you could be approved for a hard money loan in no time. Basically, hard money loans are a win-win situation for all involved.

Why do Arizona hard money interest rates seem to be higher than bank rates?

Why the high interest rates on Arizona hard money loans?

You may have heard the term “hard money” floating around in recent years and considered the possibility of purchasing a home this way. However, the little bit higher interest rates that come along with Arizona hard money tends to scare borrowers away. Make sure you know the basics of Arizona hard money before writing it off completely--you never know how you could make it work for you!

The first thing to understand is that Arizona hard money loans are equity-based. That means your eligibility for a loan does not come from your credit, ability to pay, or employment status. In fact, the loan is solely based on property value. What does this mean for you and your lender? Quite simply, it means that you have not been able to get approved for a traditional bank loan. It also means than a hard money lender is taking a significant risk by allowing you to borrow his or her personal money for a time, honestly not knowing if they will get it back. Hard money loans take a significantly higher risk than banks because the loans are based so little on you and so much on the property value.

Another thing to remember is that Arizona hard money loans are typically shorter than bank loans. Usually, these loans last anywhere from 6-36 months, but can fluctuate depending on the situation.

Another reason borrowers experience a bit higher interest rates is because they are not required to pay any application fees, recording process fees, documentation fees, or closing costs. All of those expenses add up quickly and they have to be accounted for somehow.

The main reason Arizona hard money loans charge a bit higher interest rates because of the significant risk taken on behalf of the lender. These lenders go where banks refuse to go, and they lend to those individuals who would never be loaned to otherwise. They don’t look at a borrower’s ability to pay--they simply trust that that borrower will do what they say they will.

What about LTV in terms of Arizona hard money?

Simply put, the LTV stands for the Loan to Value ratio of an Arizona hard money loan. Sometimes, borrowers can receive up to 80% of the money pertaining to the property value. Most of the time, this number is anywhere between 65% and 80%.  This is determined on a case by case basis and is a decision made between you and your borrower.

Making your dreams a reality through Arizona hard money

You know when you’ve found it. It is the perfect size, shape, and color. It meets all the needs of your family, it is comfortable, inviting, and needs to be YOURS. When you find the home of your dreams, the last thing on your mind is playing the waiting game with your lender. And, sometimes when you do choose to play the game, you don’t get approved for the loan and the home has been bought out from underneath you. Believe it or not, there is a solution to this situation so many Americans find themselves in.

This is where Arizona hard money comes in. Arizona hard money loans are loans that are equity-based and processed and approved in as little as 24 hours. For the most part, hard money loans are funding for foreclosed homes and short sales, but can also be used for fix-and-flip projects or property/land purchases. Since the item you wish to purchase ultimately becomes the collateral for your lender, it is at their discretion as to whether or not they will approve your loan.

Most LTVs (Loan to Value Ratio) are anywhere from 60% to 80% of the home purchase. That means if you wish to buy a home for $100,000, you will be loaned anywhere from $60,000 to $80,000 worth of the investment. Arizona hard money is a good way to put a lot of money down on a home and then pay it back rather quickly. This helps you avoid all the mess with banks having to check your credit, employment history, and pay stubs.

While interest rates can be fairly high for hard money loans, many are short-term (about 6-36 months) so they can be paid off quickly. When acting on a short sale or purchasing a foreclosed home, the money you save could definitely be the little bit higher interest rate you would pay for the loan.

Becoming eligible for an Arizona hard money loan

The best part about applying for a hard money loan is that it couldn’t be easier to qualify. You simply contact a hard money company or lender, show them your plans and ideas, and you can get your Arizona hard money in as little as 24 hours. Eligibility for Arizona hard money is not based on credit, income level, or employment. In fact, the main determination in eligibility has nothing to do with you at all! It is all about the property you are looking to purchase. It just doesn’t get much easier than the process of hard money.