In most cases hard money is used to purchase an investment property. But there are cases when owner-occupied Arizona Hard Money Loans are funded by some lenders.
Not everyone has the credit history or even the documentable income to qualify for a traditional loan from a bank or a mortgage company. But these consumers need a place to live and can grow very tired of renting a property. Most people look at renting as paying a mortgage for the property owner and improving the property owners financial future rather than their own. As a result, many of these renters look for alternative resources which will allow them to purchase a home and begin to build their own financial security. Owner-occupied Arizona Hard Money Loans are one way to finance a home purchase that is truly creative.
If you are unable to verify your income or to show a stable and regular income level, then securing a traditional loan will be nearly impossible. It can also be a challenge to get a loan when you have no credit history or a bad credit history. But Arizona Hard Money Lenders are more interested in the value of the property that you are buying and less concerned with your personal credit. Asset-based lending is all about the property condition and value. The loan to value ratio is used to determine how much the lender is willing to offer you, and the property you are purchasing is used to secure that loan. The qualifications are much easier than those of a bank loan.
Because owner-occupied Arizona Hard Money Loans are provided by private lenders, the terms of your loan could vary but there are some fairly standard terms that you should expect. The down payment is normally between 20 – 30%. This is to create instant equity and help to protect the borrower’s investment. Some lenders will also allow co-signers on Arizona Hard Money Loans. Some Arizona Hard Money Lenders are also willing to work with you to allow for seller financing on the down payment so that you do not need to have such a large amount of cash to close the deal. And when you begin to see offers, expect to see the interest rate at just under 10% at best. Depending on the LTV, the condition of the property and your current financial health, the rate can be several points above the 10% mark.
Some hard money borrowers are first time home buyers who just need to build a credit history. Others have poor credit and need the opportunity to rebuild good credit. Other borrowers just want to refinance an existing loan or need to refinance for some reason. Refinancing might be the only way to make needed repairs or to remodel the property. While other borrowers are looking for a way to consolidate their debt.
Using hard money to finance the home that you are living in could be costly, but it certainly has several benefits over continuing to rent and pay someone else ’s mortgage and build their equity. As with any financial choice, do your research and only make a decision when you feel that you fully understand all of your options and have found the one that best meets your needs.
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 and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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