Understanding the benefits of Arizona Hard Money Loans will also explain why some borrowers opt for this higher cost loan. In many cases, the cost is well worth the benefits.
Arizona Hard Money Loans are short term loans that are offered by private lenders. In most cases, these loans are only for a maximum of five years, but borrowers have the ability to negotiate almost all of the terms of Arizona Hard Money Loans so it can vary. There are many benefits that borrowers enjoy when using hard money, but for the most part, the benefits can be broken down into three categories.
Speed is often times the most appealing benefit to hard money. Lenders are more focused on the value and condition of the property which is going to be the collateral for the loan than they are the borrower's personal credit. For this reason, there is far less time wasted evaluating the borrower's personal finances. The lender can have an appraisal done on the property and know exactly what it is worth. This saves a lot of time and money since there are no deep dives into banking records and past taxes.
Flexibility is another great benefit to hard money. When you work with a traditional lender, you are forced to accept the terms that the lender offers. They have processes and procedures in place, and that is the only way that they will do business. But Arizona Hard Money Lenders are willing to negotiate almost all of the terms of your loan to create an agreement that meets all of your specific needs and is also financially beneficial to the lenders. This might allow you to have a creative repayment schedule or even an option to extend or refinance the loan rather than face a large balloon payment at the end of the term.
Getting Approved
Approval is a critical benefit to many borrowers. Hard money is an asset-based form of lending which means that the approval of the loan is based far more on the value of the property than anything else. This means that a borrower with bad credit or no credit can still qualify for a loan from Arizona Hard Money Lenders. What you need to remember is that the worse your credit is, the more risk you represent to the lender. And in almost every case, the lender will want to make more money on these higher risk deals. So you will qualify for the loan but you will be paying a higher interest rate, and you might also be forced to make a larger than normal down payment.
The Benefits Are Worth The Cost
Even at a higher cost than traditional loans, Arizona Hard Money Loans are a very good option for many borrowers. When the only other choice is to pass on the opportunity to buy a great property, then a slightly higher interest rate is not such a bad option. But it is important to understand the terms of the loan and to know the total cost of the loan to be sure that you will still be able to make a profit on the property when you sell it.
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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