5 Things You Need to Know About an Arizona Bridge Loan

An Arizona bridge loan is a special type of short term loan that can help you buy a new home. It is important that you know your options and fully understand the terms of your loan to make an informed decision.

An Arizona bridge loan is a specialized short term loan that can be useful for real estate transactions. It is a short term loan that allows you to use the equity in your current home as a down payment on a new home before your current home sells. As the name implies, an Arizona bridge loan is designed to “bridge” the gap by giving you funds for a down payment. The loan is paid back with the proceeds from you home sale.

A bridge loan can be very beneficial in many ways because it allows you to buy a new home and put yours on the market without any restrictions. When you are living in a home while you are trying to sell it, scheduling showings can be a nightmare, especially if you have pets or kids. It is also difficult to keep your home show ready and leave at a moment’s notice. Many buyers will also have trouble picturing themselves in your home while your stuff is there. A bridge loan can allow you buy another home while yours is still on the market by fronting you the down payment.

An additional benefit of a bridge loan is that it is relatively easy to qualify for. There is not a lot of paperwork and since many borrowers will have a high debt to income ratio because they own two homes for a short period of time, debt and credit scores are not as important as they are in traditional loans.

Important Things to Consider when Thinking About an Arizona Bridge Loan

If an Arizona bridge loan sounds like it might be a good option for you, it is important to know all of the risks and benefits and know the ins and outs of your loan terms. Make sure you are in the driver’s seat and in control of your loan at all times. Here are a few things to keep in mind.

1.       An Arizona bridge loan may have a high interest rate. Since a bridge loan is a short term loan and is secured by the sale of your current home, the lender is taking a fairly significant risk in extending you the credit. The more risky the loan, the higher the interest rate. Although interest rates do fluctuate, you can expect to pay more than the prime rate and your rate could climb as high as the double digits.

2.       You can avoid paying interest. Although the loan itself has a high interest rate, shopping around for the right loan can help you avoid paying any interest at all. Many bridge loans allow you to skip the first few months of payments. If you can sell your home during this time period, you can pay the loan back before any interest accrues.

3.       There will be fees. An Arizona bridge loan has several fees associated with it. You will pay an administration fee of about $750 and an appraisal fee on your current home to ensure it is worth what you need to sell it for. In addition, you will pay wire fees, origination fees, and points which will be dependent on the amount of your loan. When all is said and done you will probably end up paying about $2,000 to secure your bridge loan. For most borrowers this is well worth it to get them into their new home sooner rather than later. Also, keep in mind that the fees will vary depending on your lender so shop around.

4.       A bridge loan can cause stress. If your current home does not sell quickly, you will end up paying the mortgage on it, the mortgage on your new home, and the payment on your bridge loan. Make sure to carefully evaluate your finances to ensure that you can make your payments for a short time if you need to. You can also help eliminate financial stress by pricing your current home to sell quickly.

5.       A bridge loan can save you money. If you wait to purchase your new home until your old home sells, you may end up needing a short term rental. This is literally throwing money down the drain. Getting the right Arizona bridge loan and selling your current home quickly can actually save you quite a bit of money.

If an Arizona bridge loan sounds like a good option for you, start looking at your options today!

An Arizona mortgage broker or private lender can help you get started on getting your bridge loan. Call our office today to schedule an appointment. You will be glad you did!

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

  

Risk Less by Choosing the Right Lender for Your Self Employment Home Loan

If you own your own business, you may find that you have trouble getting a home loan due to strict debt to income ratios and other regulations imposed by banks. There are self employment home loans that can make getting a home loan easier. Choosing the right lender or mortgage broker can make all the difference and help make your home ownership dreams a reality.

Owning your own business has many advantages. For one, you get to be your own boss and set your own schedule. You also have the opportunity to do exactly what you want to do and grow your business in a way that makes sense for you and your family. You are not a slave to the time clock and you don’t have to deal with a domineering boss breathing down your neck. You also can take advantage of many tax write offs and can pay yourself what you are worth.

However, there can also be a downside to being self-employed, especially when it comes to qualifying for a home loan. Tax deductions can make it look like you are losing money when in fact your business is quite successful. Business loans or other debt can make your debt to income ratio look very high and having a number of business loans may even end up taking a toll on your credit. Rigid lending standards can cause banks to take one look at your tax returns and send you out the door so fast your head will spin.

This can be very disheartening. You have spent your life building a successful business, but the very elements that make you successful make you look like a lending liability. Even if you have a steady stream of income, it may be difficult to verify using traditional lending standards and the situation may seem hopeless. But, don’t fret. There are many, many options for self employment home loans and many lenders who can help you find the home loan that you need.

4 Benefits of Using a Private Lender for your Self Employment Home Loan

If you find yourself in the unfortunate situation of being denied by a bank, start thinking about a private lender. A private lender is a mortgage broker or investment firm that has access to private funds and collateral that can be used to fund a self employment home loan. A private lender is licensed by the state that he works in and still must adhere to federal fair lending practices and guidelines. This is good news for you because it provides protection for your investment and recourse if you feel you have been treated unfairly.

There are many benefits to using a private lender compared to a bank. Here are four of the most common benefits that a private lender can offer.

1.       Easier qualification process. Since private loans are funded by investors, there are less stringent qualification requirements. This means that bad credit, high debt to income ratios due to business loans or tax deductions, or even previous foreclosures or business failures matter much less. A private lender is more likely to look at your entire financial pictures as well as the potential to make money on an investment property than a bank is. This makes getting a loan easier. Also, there is a lot less paperwork which can be a huge bonus for the busy business owner.

2.       Faster qualification process. A bank can take 30 to 45 days and in some cases even more to fund a loan. With a private lender, the process can take as little as a week. This is great news if you want to buy a property quickly or want to make your offer stand out in a bidding war. Often sellers will take a lower offer with a faster close time to unload the property quickly.

3.       Investment opportunities. Private lenders and private self employment home loans are often tailored for investment properties. As a business person, you know the value of real estate investing and can take advantage of a private lending firm.

4.       A private lender has access to loans that banks do not. From hard money loans to other private collateral loans, a private lender can find the right loan for you.

Don’t delay, act today!

Find a private mortgage lender to get started on your self employment home loan. You will be glad you did!

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

  

How to Use Arizona Bridge Loans to Benefit your Small Business

Arizona bridge loans are gaining popularity in the housing market as a way to bridge the down payment gap and allow buyers to purchase a new home before selling their current home. They are also a valuable tool for small business owners to get cash quickly based on business collateral and upcoming deals.

Arizona bridge loans are short term loans that are designed to bridge the gap between needing liquid cash and a future investment paying off. The most common use of Arizona bridge loans are during the home buying process to bridge the gap between needing a down payment for a new home and selling a current home. The bridge loan is secured to the original home, the one that's on the market. The funds from that loan are used as the down payment for the mortgage on the new home. 

There are no strict guidelines when it comes to Arizona bridge loans so credit score and debt to income ratio are not usually factors that will automatically disqualify you. This is good news for borrowers with less than stellar credit or who may have a high debt to income ratio once they purchase their new home. Instead, bridge loans are based on a few different factors, including how likely it is that you will sell your current home quickly, and whether or not you can make both mortgage payments for a short time if it becomes necessary. If you default on a bridge loan, the lender has recourse to get their money back using the property you have on the market because it is the one that secured the loan.

A bridge loan can be a good option for individual borrowers who want to purchase their next dream home but have not sold their current home. A bridge loan usually has a higher interest rate but certain loans allow you to skip payments, making it unlikely that you will have to pay any of the interest as long as you sell your home quickly. A bridge loan also allows you to put your home on the market quickly and without any schedule restrictions. You can even stage it to make it sell more quickly. A vacant home will usually sell more quickly and for top dollar so a bridge loan can help you earn more money on your home sale.

How to Use Arizona Bridge Loans as a Business Owner

A less common but still beneficial use of Arizona bridge loans is to help your small business when you are strapped for cash. Sooner or later most business experience a cash flow issue. A bridge loan can help "bridge" the gap between today's need for immediate cash to pay bills and the final closing of a pending investment deal or long-term financing package.

If you find that you need some immediate cash before a big deal pays out, a bridge loan can be a good solution for your business. In order to secure the loan you will need to prove your ability to pay the loan back. A few ways to do that is through:

·       Earnings. It is possible that a lender may be willing to extend a bridge loan on the basis of earnings alone. You will need to have a stellar credit history, a consistent track record of making profits, and strong sales to show you can repay the loan in a short amount of time. Unless you are able to fulfill all of these requirements, you will need to find another way to obtain financing. ·       Collateral. If your earnings aren’t up to par, you can use business assets as collateral to obtain a bridge loan. Equipment, real estate, and other capital assets can all be used to secure a bridge loan. Contact a broker or investment professional to get started on finding the best bridgeloan for your business today! A broker can help you navigate the ins and outs of Arizona bridge loans whether you need one for business or real estate. Having the right financial professional by your side can help you risk less and benefit more. You can get the cash you need and help protect your current assets. Call our office today for more information on   Arizona bridge loans.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

  

Risks and Benefits of an Arizona Bridge Loan

An Arizona bridge loan is a specialized type of short term loan designed to help borrowers get cash fast and can be used to help you purchase a home. Knowing the risks, benefits, and ins and outs of bridge loans can help you make a smart decision.

An Arizona bridge loan is a common way for home buyers to come up with a down payment when they are buying a new home while concurrently selling their current home. Most buyers rely on the sale of their current home to come up with the down payment for their new home, however, it is not always feasible or ideal to close on the current home first. In a perfect world, you close on your home at 9:00 a.m., have funds available by 10:00 and close on your second home before noon. But it very rarely works this way. More often, you close on your current home and have to find a short term rental for a month or two before you close on a new home. This is not only expensive, but it causes you to have to move twice and you are literally throwing money away by renting.

One solution to the problem is an Arizona bridge loan. A bridge loan bridges the gap by lending you the down payment for a new home that you then pay back once your home sells. The bridge loan is secured to the buyer's existing home. The funds from the bridge loan are then used as a down payment on the new home. Bridge loans are gaining in popularity as a down payment option because they offer flexible terms and are relatively easy to qualify for. Also, many lenders will not allow you to take out a home equity loan on a home that is listed for sale, so in many cases a bridge loan is the only option to come up with cash for a down payment.

5 Things to Know About an Arizona Bridge Loan

Like any loan, a bridge loan has certain risks and benefits. Knowing all your options and going into it fully informed will help you risk less and benefit more. Here are five important things to keep in mind if you are thinking about getting an Arizona bridge loan.

1.       Qualification is usually an easy and painless process. Most lenders do not have set FICO scores or debt to income ratios for bridge loans. Instead, qualification is based on a complete picture of your finances and whether it makes sense to purchase a home before you sell your current one.

2.       You will pay a higher interest rate. Like many short term loans, bridge loans have higher interest rates than 30 year loans. You usually have a grace period of 1 to 4 months depending on your loan terms and if you pay the loan back with proceeds from your home sale, you can usually avoid paying a lot of interest.

3.       You have to be able to qualify for two mortgages. A bridge loan can help you with a down payment, but you will still need to qualify for two mortgages and be able to make monthly payments on both if push comes to shove. However, most mortgages don’t require a payment for the first month so if you sell your home quickly, you can usually avoid double payments.

4.       Bridge loans can help you sell your current home more quickly. A home that is lived in is always harder to sell than one that is vacant and staged. By moving into your new home, you will give yourself the best chance of selling your existing home quickly and for top dollar.

5.       You can find your new dream home without the stress of having to sell your existing home first. You don’t have to wait or make unattractive contingency offers. You can purchase your new home immediately which will usually get you a better price and help make sure you get the home you want.

If an Arizona bridge loan sounds like a good option for you, find a broker or private lender today to get the process started today!

At Level 4 Funding we specialize in bridge loans and other short term loan types. Call our office today to schedule a consultation to find out if a bridge loan is a good option for you. Don’t wait on a slow market to buy your next dream home. Use a bridge loan to get into the home you need today.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

  

Self Employment Home Loans: A Win-Win for Business Owners

If you are self-employed, a self employment home loan might be a good option for you to purchase an investment property. Contact a mortgage broker to learn more about your options and loans today!

 If you are self-employed, you know the benefits of having your money work for you. One relatively easy and painless way to invest is with real estate. Although there have been ups and downs, experts agree that real estate investing has been overall stable and a way to increase your assets. Real estate has consistently appreciated in value over time and since it is a physical investment, you always have something to fall back on, even if the value goes down.

Although real estate investing may have many perks, it can also present unique challenges if you are self-employed. Since you own your own business, you can take advantage of many tax write offs that will save you big on your taxes. Everything from your office space to your paper clips are tax deductible. These deductions can make it look like your business is not making as much money as it actually is, and in some cases it may even look like you lost money.

While normally having a negative income stream is not a problem (as long as it is temporary, if it goes on too long, the IRS may object), it can present challenges when you are looking to make a real estate investment. This is especially true if you already own a property that you use as a primary residence. The bank may take one look at your tax returns and debt to income ratio and send you to the door, empty handed.

Being rejected for a loan can sting, but do not be discouraged. Instead, say good bye to the bank and hello to a licensed mortgage broker or private mortgage lender. Brokers and private lenders have access to different self employment home loans than banks do and can often work with you around mortgage requirements to find a loan to fit your needs. There are many options, especially if you are looking for a short term investment property like a fix and flip or short term rental.

3 Types of Self Employment Home Loans That Can Help You Make Money

 Once you have found a mortgage broker or private lender, you will be given many different self employment home loan options. Like anything else in life, it is important to remember that all loans are not created equal, and the best loan for you will depend on your ultimate investment goals. A few loans to look into are:

1. Hard money loans. A hard money loan is a great self employment home loan if you are looking for a short term investment. A hard money loan is not backed by a bank but instead by an equity firm or group of investors. They evaluate the property you are purchasing based on its investment potential. This makes your income or other debts less important because their investment is protected by the physical collateral of the property in question. Once they decide a property is a sound investment, they give you the money and you pay interest on it. The interest rate is usually pretty high so a hard money loan is best used as a short term loan to fix up a property and sell for a profit quickly. Once you sell the property, you repay the investors and any additional income is yours.
2. Adjustable Rate Mortgages. An adjustable rate mortgage is a good option for a longer term investment. An adjustable rate mortgage or ARM has an initial fixed interest rate that is usually very low. The low interest rate means lower payments so it is easier to qualify for, even if you have other mortgage debt or a low income due to business deductions. After a period of 1 to 7 years, the rate resets to a higher rate and your payment goes up. An ARM is a good option if you are going to rent out a property for a few years or do a long term fix and flip. An ARM can also be a good option if you anticipate your income increasing and will be able to refinance before the rate resets.
3. Stated income mortgages. A stated income mortgage does not use W2’s and tax documents to verify your income but rather goes by what you state it is. This can be a good option if your taxable income and actual income are vastly different. Just keep in mind that you may pay a higher interest rate and it is important to not over-extend yourself.

With a variety of self employment home loan options, don’t let a bank keep you out of the property investment market. Call a mortgage broker and get started today!

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

Bad Credit Home Loans Arizona: How to Make Money Investing in Real Estate Using Hard Money Loans

If you have bad credit you most likely think that real estate investing is impossible. However, with bad credit home loans Arizona and hard money lending there are options for individuals with bad credit to take advantage of real estate investment opportunities.

Most financial experts will tell you that real estate is a sound investment. Real estate has consistently earned money over time and is a way to help build your investment portfolio and personal wealth. However, for many individuals with bad credit, real estate investing has been beyond their reach using traditional loans. Approximately 42.5 million Americans have a bad credit score and are considered sub-prime borrowers. If you are in the market to start real estate investing but you have bad credit, there are a variety of bad credit home loans Arizona mortgage brokers recommend.

One type of loan available to sub-prime borrowers is a hard money loan. A hard money loan is a specialized type of real estate backed loan. The lender is an investor or group of investors rather than a bank. The lender offers short term capital loans to purchase investment properties. The term of a hard money loan is generally no more than two years and is designed to make money on real estate for both the borrower and the lender. Hard money lenders focus on the value of property being purchased rather than the assets or credit score of the borrower. For this reason a hard money loan is an invaluable opportunity for an investor looking for bad credit home loans Arizona mortgage brokers recommend to purchase a property as a short term investment. 

Hard money loans are available for all property types including commercial, residential, multi-family, and even land loans. Each lender or group of lenders determines the requirements for what types of loans they will give as well as how much money they will lend. If the lender gives loans on residential properties he/she/they are required to be licensed through the National Mortgage Licensing System (NMLS). In order to sure that the lender you are using meets all requirements, it is best to use a broker or investment team that specializes in hard money lending. 

Hard Money Lending Regulations

Although hard money loans have significantly less regulations than traditional mortgages, there are certain federal regulations that apply to hard money lenders. For most property types, hard money lenders do not require the same income verification or credit score guidelines that traditional banks do. This is part of what makes them ideal bad credit home loans Arizona residents with bad credit can use, as they look at the value of the property from an investment standpoint, not based on credit or income. However, it is important to note that hard money loans are more risky for the lender and therefore come with a higher interest rates. In addition, if you are taking out a hard money loan on a residential property, you will be required to some proof of ability to repay the debt. This means some type of proof of income though it is usually less stringent than what a bank requires. 

When you take out a hard money loan, the property that you are investing in becomes the collateral. If you default on the loan, the lender will seize the property to protect its investment. If you take out a hard money loan, make sure that you will be able to pay the loan back in full at the end of the term by either selling the property or other means. When you sell the property you keep any money that is earned above the amount of the loan and any accrued interest. 

Talk with a mortgage broker or investment company about hard money lending.

A financial professional or mortgage broker can help you decide if a hard money loan is a smart financial choice. It is a great way for Americans with bad credit scores to start taking advantage of real estate investing. In addition, hard money loans can benefit prime borrowers as well. If you already own a home you may not qualify to purchase an investment property based on your debt to income ratio. A hard money loan can be a great work around to get you into the real estate market. Call a broker or your financial adviser to learn more today.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027