Setabay Private Hard Money Lender: How to buy a house with bad credit in Arizona

How to buy a house with bad credit in Arizona: Analyzing the Risks and Benefits of a Sub-Prime Loan

Sub-prime lending and loan types that have been blamed for triggering the housing collapse in the mid-2000s. However, with more and more borrowers wondering how to buy a house with bad credit in Arizona, these loans are making a comeback. Many experts are wondering if tougher regulations can keep them safer.

Borrowers with bad credit or even credit blips are often turned down for home mortgages by traditional banks. Some bad credit borrowers have been thwarted for years by banks that have virtually shut down mortgage lending after the financial melt-down and housing crisis in the mid-2000s. A growing number of these individuals that are deemed “too risky” or credit impaired by traditional banks are asking questions like how to buy a house with bad credit in Arizona. With the right lending company, many are finding that this is not an impossible task.

New sub-prime loan products are hitting the market almost daily and helping to answer the question of how to buy a house with bad credit in Arizona. Unlike some of the more risky loans given out by banks in the early 2000s, the new sub-prime loans are more heavily regulated and require more documentation. They require down payments as well as documentation that the borrower can make monthly payments. In addition, some reformed sub-prime loans are backed by the government and may even have lower interest rates (at least initially) that traditional mortgage options.

There are several types of sub-prime loans including adjustable rate mortgages, hard money loans, FHA loans, and a number of other private loans offered by equity firms and private investors. If you are in the market for a sub-prime loan, it is important to know exactly what the terms of your loan are and to be smart about the type of loan that you choose.

Danger, Beware, Danger – Avoiding Risky Arizona Mortgage Lenders

If you are in the process of navigating the sub-prime mortgage market, make sure to find a mortgage broker or lending firm that has a good reputation. Foreign and domestic investors are pouring billions of dollars into the sub-prime lending market. While there are many, many reputable private equity firms, there are others that will take advantage of the desperation of a borrower with bad credit.

When you investigate a lending firm, make sure that they operate under a valid broker’s license and are qualified to offer the loan products they sell. This is especially important if you are working with a foreign investment firm or a private equity firm. When they are helping you figure out how to buy a house with bad credit in Arizona, the firm should discuss more than just the interest rate with you. You should also know what your loan is called, the exact terms of you loan, the interest rate, and your estimated monthly payments including interest, taxes, and insurance. You should also be asked for some proof of income to insure that you are able to make your monthly payments. If you have bad credit, you will most likely pay more for the loan in terms of interest, generally about 6 to 9 percent but the rate should not be near the usurious loans prior to 2008, when rates often exceeded 15%.

Once you are offered a loan product, you should sit down and really look at your monthly budget. Think about if you will be able to make the monthly payment. If the answer is yes, then you should also consider your long term goals as well as your credit history. If you have bad credit, it is important to think about if this will change. On time mortgage payments are a great way to rebuild your credit and you may be able to refinance to a lower interest rate in the future. Also, consider if the home you are buying will be a short or long term investment and estimate and profit you may make, after the higher interest rate is taken into account. Your broker should be able to give you detailed fee sheets with different financial, down-payment, and interest rate options so you can see all the numbers in black and white.

Stop wondering how to buy a house with bad credit in

Arizona and start making your dreams come true.

Although it is important to make sure you know what you are getting into with a bad credit home loan, it should not scare you away from purchasing a home. Many Arizona Home Loan lenders and equity firms are there to lend a helping hand to purchase your dream home. Making sure you are aware of all the financial ramifications will help you make the right decision for you and your family. Contact an Arizona mortgage broker or equity firm to get started today. Their licensed mortgage professionals can help you analyze the risks and benefits of sub-prime loans and choose the right product for your home purchase.