Negotiating with traditional lenders is not always an option. But using a few tips, you can successfully negotiate with Hard Money Lenders in Arizona.
Arizona Hard Money Loans are unique because they are offered by private lenders who are often much more willing to work with potential borrowers. But it is important for borrowers to understand that these lenders are in business to make money. So borrowers must be savvy in order to take full advantage of the negotiation process with Hard Money Lenders in Arizona. If a borrower is not careful, he or she could end up paying way too much for a hard money loan.
It is important to know the lenders that you are working with and understand the criteria that each lender requires to fund a hard money loan. Doing some simple research will let you evaluate all of the potential lenders to determine which one will best meet your needs while also offering the best total cost on the loan that you need. Knowing the interest rate as well as any fees that the lender charges are the very least that a borrower should know. Asking about the repayment terms, any early repayment penalties and the determined time frame for a forfeiture are also important and should be researched.
What many borrowers do not understand is that Hard Money Lenders in Arizona are free to negotiate all of the terms of a loan, unlike a traditional lender. So borrowers can ask for the payment schedule to be amended, a grace period for late payments or even interest-only payments for the first few months of the loan. But the borrower must also understand that all of these custom terms can cost more than a traditional loan. But being able to easily afford the loan payments can be worth paying a little bit more interest.
Good Requests
Because Arizona Hard Money Loans are expensive, it is wise to negotiate as many points as your hard money lender is willing to allow. Always ask that there be no early repayment penalty. This can save you a great deal of money if you are fortunate and can pay the loan off early. With no penalty, you are actually saving the cost of some of the interest but the penalty is often as much as the savings on interest. In addition, ask for any administrative fees to be waived or reduced as that is just an added-money maker for the lender.
Give And Take
As you negotiate with Hard Money Lenders in Arizona, it is important for you to decide which is more valuable to you, time or money. If time is more important, then ask for a longer repayment schedule. But understand that you will be paying more interest on the borrowed money. If your budget is very tight, then ask for a shorter term on the loan to help reduce the amount of interest that you will be paying. Both you and the lender are in business to make money and the only way you will both accomplish that is to agree to some give and take in the negotiation process.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO
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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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