Knowing that a hard money loan is more expensive than a traditional loan could cause you to wonder why people even consider hard money. But there are three particular benefits that are often enough to entice borrowers into using hard money. Understanding these three perks and how to take full advantage of them will help you to see why Hard Money Loans in Arizona are very popular with real estate investors.
Hard Money Loans in Arizona are also referred to as asset-based loans by some lenders. This means that the property being purchased is going to be the collateral for the loan. It also means that the lender is going to be more interested in the property value than the credit history of the borrower. And without the long and drawn out process of doing a credit check, the approval process can be much faster for hard money. This is a huge benefit to real estate investors who are searching for great deals in a very competitive market. Hard Money Loans in Arizona can fund much more quickly than a traditional loan and allow investors to make fast deals on in-demand properties.
Another great benefit of hard money is that the lender is a private individual who can offer much more flexibility than a traditional lender. This can be a big benefit when setting up the repayment schedule or even when working on the date of the first payment or a variable payment amount. No traditional bank or mortgage company will have the ability to work with you on the terms of a loan. You take what they offer or find another lender.
Because hard money is asset-based, there is not the long process of proving the borrower’s creditworthiness to the lender. The lender wants to determine the value of the property being purchased and used as collateral, then they will determine the amount of the loan. It is much faster and far less time consuming or complicated for the borrower and the lender. In addition, asset based loans are great for borrowers who have less than perfect credit and are not able to finance through a traditional lender.
As with any process that is made easier and faster, there is usually a cost associated with it. And in this case, private lenders know that the speed, ease and flexibility of hard money is a commodity worth paying for. The lenders will charge a higher interest rate than a traditional lender and also might charge more fees than a bank or mortgage company. But if you are aware of the benefits, then you are most likely going to be willing to pay a little bit more to get them. Hard money will allow you to bid on and pay for high demand properties in as little as a week rather than the two or three months it could take to fund a traditional loan application.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
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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