What Are Hard Money Loans?

January 6, 2019
January 6, 2019

What Are Hard Money Loans?

Most consumers are aware of the process to secure a traditional loan. But only a very few know about Hard money loans in Arizona and how to use them.

Traditional lenders are the banks and mortgage companies that you see online and with brick and mortar locations all over the country. These lenders offer relatively competitive rates and terms as they are federally regulated. But they also require borrowers to fit into a fairly specific mold to qualify for a loan. So the question is, what are your options when you don’t fit into that perfect mold which includes a steady paycheck from an employer, a good credit score and a low debt to income ratio? The answer for many borrowers is to try out using hard money loans.

What most people don’t understand in the beginning is that Hard money loans in Arizona are just loans from private lenders rather than a bank or other lending institution. These loans are legal, so don’t think that you can skip out on the payments because the lender can sue you or take your collateral. And the lenders themselves are not street thugs, drug dealers or other unsavory characters who are looking for a way to appear legitimate while laundering illegal profits. Arizona Hard Money Lenders are just average people who are looking to use their money to earn interest and make a living.

The reason that Arzona Hard Money Lenders are appealing to many borrowers is that these lenders are not scouring the borrower’s application and credit history to decide if they will be a suitable risk for the loan they are requesting. These loans are asset-based rather than credit based. That means that the borrower must offer collateral to secure the loan. In most cases, the collateral is the property that you are using the loan to purchase. But the only requirement in most cases is that the collateral is worth more than the balance of the loan.

Instant Equity

As you might have guessed, being asset-based, Hard money loans in Arizona are never going to be for the full purchase price of the property. That means that as a buyer, you must be able to make a down payment on the property which will provide you with instant equity and the lender with some security. Your equity is the lender’s security because if at any point during the term of the loan, you fail to make the payments, the lender has the right to take the property from you. Even if you only owe a few more payments which total a few thousand dollars on a few hundred thousand dollar house, the lender can take the property and keep the total amount that he or she can sell it for.

Why Use Hard Money?

It might sound like hard money is only a good deal for the lender, but that is not the case. A hard money loan is a great way for someone who has bad credit or no credit to purchase a property without saving the total purchase price. In addition, hard money normally funds very quickly so this loan is great for someone who is looking to make a purchase quickly and can’t wait for a traditional lender to approve the loan. But as with any loan, the most important part is to read the document and understand what is expected of you prior to signing.

Dennis Dahlber Broker Ri CEO Level 4 Funding LLC
Dennis Dahlberg


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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