Many first time investors are curious about hard money Mortgages. What do these Mortgage companies do? Who are they? Where does the money come from? These are all common questions coming from those with little to no experience with the hard money industry. Let me enlighten you on what Arizona hard money lenders do and a little bit about how they work.
The term “hard money” is important to understand. Clearly the opposite of what investors call “soft money” (that referring to Mortgages that are easier to qualify for and are more flexible), hard money is a little more restrictive. This makes perfect sense because most hard money Mortgages come from private Arizona hard money lenders and are not based on credit or ability to pay so the risk is much greater. This money does not come from a bank or typical lending institution, but rather from a private investor with extra money on hand.
First, know that Arizona hard money lenders are on your side. They understand that a difficult financial past can damage your qualifying power but should not keep you from pursuing your dreams. That’s why they don’t check your credit, ask you to provide pay stubs, or investigate your financial history. The Mortgages are completely equity-based, so they have less to do with you than you think.
Most Arizona hard money lenders will Mortgage you anywhere from 60% to 85% of the value of the property or home you are looking into buying. Typically these Mortgages tend to be on the short side (about 6 to 36 months) and have higher interest rates than most Mortgages. The interest varies according to your credit score and experience.