Opportunities in residential investments have skyrocketed these last seven years. Funding, however, is not as easy as it used to be. Find out which Arizona Residential Hard Money Lenders offer the best rates and terms.
Traditional lenders offering home loans have been scarce since the credit crisis in 2008. Arizona Residential Hard Money Lenders have filled the gap that the traditional lenders have left. These types of lenders offer residential loans at higher interest rates and low loan to value on the property. When traditional lenders are hesitant to step in, hard money lenders are a very good option. The capital from Arizona Hard Money Lenders is available to every type of customer for real estate investing.
Private lenders base their lending on the loan to value ratio; traditional lenders base their credit decision on credit scores, income tax statements, and tax returns. Arizona Residential Hard Money Lenders base their decision on the property as collateral. As a basis for the underwriting of the residential property, the lender considers the equity in the property for their decision. Some of the Arizona Hard Money Lenders deal in land estates and projects with a high equity. Arizona Residential Arizona Hard Money Lenders base their decision by the Loan to Value using the current market value.
The money from An Arizona Hard Money Lender on a residential property acts as a temporary bridge for mortgage refinancing, avoiding bankruptcy or acquisition. This is an option many investors choose when faced with giving up control of the property to financial partners or filing for bankruptcy. An Arizona Residential Hard Money Lender offers people loans for renovation of the residential property and then renting out the property or selling it. The Hard Money Loans in Arizona is based on the value of the real estate property which is also the collateral for the loan. The loan is often 60-75% of the market value of the property. Typically, hard money residential loans can be found at interest rates from 11% to 12%, with 12% the standard for second trust deeds. The loan to value is 60% maximum on improved properties and 40% for vacant land.
Traditional Versus Arizona Hard Money Lenders
Traditional lenders offer loans based on credit reports, income statements and tax returns. Traditional lenders base the interest rates and fixed loan amounts, and other terms and conditions, on the borrower’s eligibility. Hard money residential lenders provide funding based on the value of the real estate. The documentation is much lower than traditional lenders. Eligibility is flexible, even borrowers with poor credit and little documentation are able to secure primary residence loans. The loan to value ratio runs approximately 65%.
The values are determined on the property’s current market price. The hard money lender will fix the price at which the property is sold.
If the borrower defaults on the loan, then the hard money lender will seize the property and possibly sell it. In most cases, the lender will allow the borrower a grace period of one to three months before selling the property. The bottom line: investors and home buyers often use Arizona Hard Money Lenders to access Arizona Bridge Loans for residential home mortgages. These types of loans enable buyers to “bridge” from one loan to the next. Instances when these types of loans are beneficial include when someone wants to buy a house before their existing house sells and the market is such that a contingency offer will probably be passed over. At Setabay, we offer quick-to-funding Arizona Bridge Loans at lower than average rates. Call us for a no-obligation quote.
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.