Borrowers need to understand how Arizona Hard Money Loans work to take full advantage of their benefit. Used correctly these loans can provide a huge ROI.
Arizona Hard Money Loans are simply another name for asset-based loans. What this means for borrowers is that the loan approval is based on the value of the property being used as collateral and not so much on the creditworthiness of the borrower. In addition, these loans are not funded by a traditional bank. Instead, they are offered by private lenders who are in business to make money from the interest on the loans that they make. And being that these loans are from private lenders, the terms, while normally shorter in term, can be much more flexible than a loan from a traditional bank.
Asset-based loans can be used to purchase just about any type of property including single-family and multi-family residential, commercial, land or even industrial property. It can be important to know what types of loans a given hard money lender specializes in, or if he or she will fund any type of property loan. The only stipulation is that Arizona Hard Money Lenders will not fund a loan for an owner-occupied property because of the additional rules and regulations on those types of loans.
Because these loans cannot be used for owner-occupied properties, these loans are normally used by real estate investors. Investors appreciate that hard money will fund much more quickly than a traditional loan and that the lenders are often far more flexible on the terms of the loan. In addition, because the loan approval is based on the collateral value and not the borrower's personal credit or credit history, borrowers can carry many Arizona Hard Money Loans which are not often possible in the case of a traditional lender.
Best Deals For Hard Money
Arizona Hard Money Loans are not the best choice for every deal, but they are tailor-made for some types of deals. The terms and process of funding hard money make them the perfect resource for real estate investors who are interested in fix and flip properties, land or construction loans or when there is a great deal of competition for a property. The fast funding allows the borrower to secure the property and then refinance to a longer-term loan.
The Fine Print
As a rule, hard money is normally a tool used for higher risk loans. And as such, the cost of the loan is a bit higher than a traditional loan. The rates will vary from state to state. Areas with more Arizona Hard Money Lenders will tend to offer more competitive rates as opposed to areas with fewer lenders. Typically, borrowers can expect to pay between 10-15% interest on hard money as well as 2 to 4% of the total loan in points. But for a fast approval process and less strict credit requirements, hard money is a great option for borrowers who understand these loans and know how to use them properly.
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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