Understanding Hard Money Lending

Even experienced borrowers often have questions about hard money lending and how it works.

Hard money refers to capital available outside of conventional lending institutions such as credit unions and traditional banks. A hard money loan is secured by the borrower’s real estate. Hard Money Loans in Arizona are typically used by real estate investors to quickly obtain the funds needed to purchase or refurbish a property. These loans can be used as bridge loans until a time when the borrower can secure more traditional financing or until they sell their property.

Hard Money Loans in Arizona are short-term loans-typically with one year terms. Some benefits of hard money loans are the ease of the underwriting, fast approval and the emphasis on the borrower’s assets versus their credit. Texas Hard Money Lenders don’t to have to follow the same rules and regulations as conventional lending institutions, therefore allowing more flexibility in the loan terms.

WHAT ARE TEXAS HARD MONEY LENDERS?

Texas Hard Money Lenders are typically private financial groups with capital that is available for loans in certain geographical locations. These lenders have their own set underwriting policies and approve funds using a loan-to-value ratio.

Texas Hard Money Lenders are investors that are seeking better returns than typical investments allow. They approve riskier loans than conventional banks do. Because these are asset-backed loans, Texas Hard Money Lenders require much less documentation than traditional banks. Approval and funding can usually be completed within a week—unlike banks, who can easily take up to two months for funds to be available to the borrower. Texas Hard Money Lenders do not require tax returns to prove that the property is generating revenue. Many borrowers run into problems when attempting a conventional loan due to their properties not all being listed on their tax returns.

Texas Hard Money Lenders will provide funding for many types of properties, but they will not fund all types. Many Texas Hard Money Lenders will not fund owner-occupied hard money loans for residential properties— these situations are government regulated and will result in more documentation and involve federal regulations involving the borrower to meet a debt-to-income ratio. Texas Hard Money Lenders do not work on a debt-to-income ratio because they are asset-backed and do not typically lean on the lenders credit worthiness or income. However, lenders will typically approve loans for owner-occupied commercial properties. Lender rules and regulations are different in different geographic areas — and each lender can determine their own loan terms. There is a great amount of flexibility in hard money lending.

Hard money loan applications are painless and easy. There is a tremendous amount of benefits to working with a hard money lender.

Once approved, funds are dispersed in less than 10 days. A hard money loan can help when quick capital is required to obtain a deal. Perfect credit is not a necessity when applying for a hard money loan— in fact, a borrower’s credit score is not a top priority. These loans can also be used as bridge loans until a borrower can gain approval for a conventional mortgage. There are many advantages to hard money lending. Find a local hard money lender that will assess your situation and give you options.

Dennis Dahlber Broker Ri CEO Level 4 Funding LLC 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

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.