(Arizona Hard Money Loans might sound a little shady until you learn what they are designed to offer and the terms for these loans. With this information you can decide if hard money is the solution you have been looking for.)
For the most part, Arizona Hard Money Loans are short-term loans which require interest-only payments until the end of the loan term. This might sound too good to be true, but this is a very basic explanation of how these loans work. What is also important to know is that the interest rate on these privately funded loans is over 10% and can be as high as 15% or more in some cases. But if you are willing to pay that higher interest rate, then hard money will offer you some benefit that will never accompany a traditional loan.
Being funded by a private lender eliminates the process of your loan application going to an underwriting department for an evaluation and potential approval. The lender is the person who will decide the merits or your request and whether or not the loan will be approved and funded. In addition, you have the opportunity to work with the lender to agree to mutually beneficial terms in many cases. These negotiable points can include the payment schedule, how the fees are charged and what the fee structure will be and even to some extent the length of the loan.
A basic definition of a short-term loan is one year but there are cases where a lender will carry the note for up to three years. In other cases, the loan could be as short as six months. It is always important to request that the lender note in the loan documents that there is no penalty for early repayment of the loan.
Fees and Rates
Most lenders will evaluate each request based on the merits of the project and the potential for success. If the project appears to be riskier, then the interest rate will be higher as will the points on the loan. Higher interest rates can also be expected if the borrower has an unstable financial history. But all of these points can be negotiated with the lender unlike with a traditional bank. Borrowers could offer to increase their down payment amount to secure a slightly lower interest rate. This is appealing to the lender as it increases the instant equity in the project and adds security to Hard Money Loans in Texas.
Qualifying for Hard Money Loans in Texas
Each lender could have a slightly different list of documents that he or she requires for a loan application, but there are some items that are likely to be requested. These include a few personal bank statements, the purchase contract for the property, a contractor bid and scope of work for the project, and a list of the borrowers past projects. All of this information will help to determine the potential for success or failure of the project. The lender will also want to know that the borrower has the cash or other means to cover the down payment on the property and the costs and fees for the loan and the purchase transaction. With a basic understanding of the terms of hard money, you can decide if this could be a good option for your next real estate investment purchase.
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 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
© 2016 Level 4 Funding LLC. All Rights Reserved.Copyright | Privacy Policy | *Terms & Conditions
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.