Texas Hard Money Loans are not as tough to get as borrowers often think. The name is actually very misleading once you understand what it takes to really qualify for hard money.
The term Arizona Hard Money Loans is somewhat misleading as it makes most borrowers think that it is very difficult to get these loans. But what the word hard is actually referring to is the hard collateral or real estate, that is being used to secure the loan. There is really nothing hard or difficult about qualifying for these asset-based loans.
Asset-based lending is quite different than traditional lending in that the approval for a loan request is based on the value of the collateral for the loan. In most cases, the collateral is the property that is being purchased but in some cases, the loan could be secured with another property that the borrower owns outright. Unlike a traditional loan, where the credit history and current debt load of the borrower are the main criteria for qualifying for a loan. But there are a few other points that a lender will take into consideration when evaluating Arizona hard money loans.
In most cases, the lender will provide up to about 70% of the money required for the purchase of the property. This means that the borrower needs to have a down payment of up to 30% of the cost of the property. Lenders will require that the borrower show proof of the funds that will cover the down payment before the loan is approved and funded. Not only does this motivate the borrower as he or she has personal funds invested but it also creates instant equity in the property. This is a security feature for the lender. In the event that the borrower defaults on the loan, the lender will be able to take possession of the property and sell it for at least as much as the outstanding loan balance.
Cash Reserves And Stability
In addition to proof of the down payment funds, the lender will require proof of financial stability and the ability to make the loan payments and other carrying costs associated with the property. If the borrower has a good amount of reserve cash, then the lender is more likely to approve the loan and could even offer a better interest rate as the loan represents less risk. Too many real estate projects grind to a halt when unexpected costs or issues arise and the investor is not able to pay the added costs. In these cases, the loan often falls into default and the lender is forced to try to sell the property to recover his or her investment.
Experience Counts
The real estate investment business can be very challenging. Lenders know that this business can derail many new investors who think that property flips are a great way to make some fast cash. One of the critical ingredients for a successful investment is a borrower who has experience with Texas Hard Money Loans and with real estate investing. These borrowers are far more likely to be successful and also far more likely to secure a loan with a reasonable interest rate. Meeting these three criteria will pretty much assure a borrower that his or her loan request will be approved.
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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