Indeed, tight lending these days creates opportunities for hard-money lenders like Jesus Cortez, a Phoenix lawyer who has funded 19 mortgages for up to $112,000. The mortgages carry interest rates of 14%. For lenders, the profit potential is much greater than with traditional lending, an unofficial industry spokesman. If you lend on a piece of real estate, you can brag about it, drive by it, smell it, take pictures of it.
That’s why private money lenders Arizona is such a popular tool these days – even people who have lost it all in the recent real estate bubble bursting can stand proud and say, “My credit is terrible, but my ethics are not!”
Typically, individual hard-money lenders are matched with borrowers through Mortgage brokers who make a commission on each deal. As with traditional mortgage brokers, they charge points and fees, which can be several thousand dollars per transaction. Some Mortgages are set up with low monthly payments and a balloon payment due at the end of the Mortgage term — a feature they share with some of the mortgages that contributed to the financial bust.