Not every loan is designed to meet every need. Understanding the benefits of Arizona Hard Money Loans can help you to use these loans to their greatest potential.
Arizona Hard Money Loans are designed to be short-term loans which is a critical factor that borrowers must understand. Using hard money as a solution to a long-term financial need is never a very good idea as the loan interest rate is very high. But aside from the higher cost of hard money loans, there are many advantages that can be well worth the higher cost of the loan.
From the start, Arizona Hard Money Loans are far less difficult to secure. The application process for these asset-based loans is far less complicated than the process of applying for a traditional loan. Banks and mortgage companies require many documents to prove the borrower’s financial status as well as his or her employment history and other personal credit information. But hard money lenders are more interested in the value of the property being used as collateral for the loan than they are the borrower’s credit score or credit history. In most cases, the lender requests a few months bank statements, proof of employment and income and information about the property being purchased.
In addition to the reduction in paperwork required for hard money, there is also a far less stringent credit score requirement. Most traditional lenders would like to see a credit score of 650 or more to approve a loan application. But hard money lenders are much more flexible and will consider a loan request from a borrower with a credit score as low as 550.
Fast Funding is Big
One of the biggest benefits for hard money is the fact that most loans will process much more quickly than traditional loans. A bank or mortgage company will require several weeks or even months to process an approval and then even longer to fund the loan. But with hard money, the application process can be completed in just days and the funding can also be completed equally as quickly. So investors who need to make a real estate purchase quickly can have their loan funded in just a week o so rather than in a month or two as with a traditional lender.
Use The Loan Correctly
Hard money is a loan that is provided by a private lender and can offer a huge benefit to the right borrowers. The fast turnaround time of both the loan application approval and the funding is always a benefit to borrowers. In addition, the fact that the loan is based on the value of the collateral property and not the borrower’s creditworthiness is also helpful. When used as a short-term loan to fund a real estate purchase for a fix and flip or as a bridge to make an investment purchase prior to securing traditional funding, hard money offers great benefits for the cost of the loan. As with any loan, borrowers should read all of the loan documents prior to signing them to be certain that he or she understands the terms and requirements of the loan.
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.