What do you do if your client has a bad credit score and wants to buy a home?

As a Real Estate Agent, the obvious answer is to very politely 'fire your client' and put them on your Christmas Card List.

Hopefully they will solve their credit issues and you can show them homes in the future.

Don't waste your time on this want-to-be buyer; they are never going to qualify for a loan. But wait; there is good news.

Recently there are a large amount of lenders who are now willing to take a risk on borrowers with bad credit.

When lenders consider a borrower's loan application, the lender looks at:

ü Down Payment,

ü Ability to Pay and

ü Credit Score.

There are a lot of potential clients/borrowers who have a good down payment, and great income stream, but for some unknown reason their life is a mess and their credit is in the dumpster. (Bad credit is typically someone with a FICO score less than 580.)

Today there are Arizona Lenders who will lend to an Arizona borrower with bad credit if they have a substantial down payment and can make the payments.

Rates are going to be high, and the lender is going to be picky about the type of property and use of property.
Also there are some dead stop issues, such as outstanding judgments, tax liens or pending litigation. (In most cases judgments and tax liens are paid in escrow/closing.)

So if you have a client with bad credit, check to see if they have a large down payment, typically 30% and are free of any judgments and tax liens.

If they are, and can qualify for the payment, they can get the home they are dreaming about, and you can close the deal and we can get them the loan.

If not, 'fire them, move one' and don't forget to say say Merry Christmas.

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444

Technorati Tags: bad credit,home loan with bad credit

Texas Tel:     (512) 516-1177
Dennis@level4funding.com 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 42 years. They have 2 beautiful daughters and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

How to Get a Commercial Loan with Bad Credit

You want to purchase office space or a nice tenement in an upcoming area but you have a 320 credit score. This article will show you how to get a commercial loan even if you have a bad credit score.

Let’s face it debt and Americans go hand in hand. Most of us are trying to come out from under some form of debt. In a 2015 study, the U.S. Census Bureau concluded at least 38.1% of households in America have some form of debt. In the last quarter of 2015, the dollar amount of credit card debt in the U.S. was around $733 billion. In regards to mortgage debt, the amount was a staggering $8.25 trillion.

Needless to say, a few of us have a little debt in our name. But is that supposed to stop you from being able to by that nice home for your New England bed and breakfast? No. Everyone should be able to be an entrepreneur in this day and age. You can still get a commercial loan with bad credit there are just a few more things that you have to go through before you get the loan that you need.

Before you apply for a commercial loan plan ahead

First and foremost, you want to make sure you have a clear and concise business plan. You should be able to walk into your lender’s office and be able to give them the pros of giving you a commercial loan for your business. You want to make sure you give your lender a clear and in-depth plan of action. Show them the goals you want to accomplish with this business. Provide them with the tactics you will use to bring customers or tenants to the space you want to buy. Make sure you, yourself, know what you want to do with your business.

You could also make contact with your creditors. Trying to make payments on your debt can have a good impact on your credit score. As well all know this will not happen overnight. But making an attempt to rectify the situation looks really good in the eyes your lender. You may have to pay higher rates or addition fees, but with your commercial loan, you are one step closer to your property.

Where can I go to get a commercial loan if I have all of that?

Do not fret even though you may have bad credit you still have come options that you have at your disposal. There are some banks that will work with you however your options are kind of slim. An option that a lot of investors with bad credit look into is borrowing from hard money lenders. Most of the time hard money lenders do not worry about your credit score as long as you have a form of collateral. If for some reason you cannot pay your loan back, then the collateral used will be auctioned off for profit. The only drawback that you will most likely have is the higher interest rate that you will have to pay.

Here at Level 4 Funding we specialize in commercial loans for bad credit investors. You may end up paying a bit more interest but in the end it will be worth it to have the loan that you need to grow your business. Hopefully, this gives you the confidence to go and get your commercial loan for your news business.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Bad Credit Home Loans Arizona: How to Get a Home Loan

Many families think that home ownership is beyond their reach because they can’t get bad credit home loans Arizona. However, this is simply not true as there are a variety of programs available to help borrowers with bad credit purchase a home inArizona.

If you have been denied a home loan in the past due to bankruptcy, bad credit, or sub-prime credit, you may think that purchasing a home is out of your reach. Many borrowers don’t know that there are a variety of programs available to them, even if they have less than perfect credit. Don’t let bad credit hold you back from obtaining a new home for your family or as an investment. Learn about your options for purchase and talk with a mortgage broker.

One program that can help individuals looking for bad credit home loans Arizona qualify to purchase a home is an FHA loan. FHA stands for Federal Housing Administration and this entity gives out a type of government backed loan. Borrowers are only required to make a 3.5% down-payment so it can help keep some cash in your pocket. In addition, the loan is insured by the federal government so banks are more willing to lend to sub-prime borrowers. This insurance will cost you though. Be aware that if you take out an FHA loan, you will be required to pay make PMI payments. These can be anywhere from 80 to over 200 dollars a month depending on the amount of your loan. You will make them until the loan amount that you have is less than 80 percent of your purchase price. The PMI payments are a type of insurance you pay to help secure the investment in case of default.

Another loan type that is available for borrowers in the market for bad credit home loans Arizona is an adjustable rate mortgage or ARM. An adjustable rate mortgage is a short term mortgage with a term of anywhere from 1 to 7 years. During your initial term the interest rate on your mortgage is very low, usually below the prime rate. This makes your payment relatively low as well. The lower monthly payment allows borrowers with bad credit to qualify when they may not be able to for a traditional 30 year loan. After the initial term of you loan, the interest rate resets and your payment may be higher. This can be a good option for someone who is on the road to repairing his credit and will be able to refinance to a 30 year mortgage at the end of the adjustable rate term. One thing to keep in mind with an ARM is that they require a 10% down-payment. This helps ensure that the property value will not drop significantly below the loan amount.

A final type of program that a borrower in Arizona with bad credit might consider is a hard money loan. A hard money loan is designed as an investment strategy and isn’t a good option for owning a home you intend to live in long term. A hard money loan is backed by a group of investors, rather than a bank. The investors will look at your property purchase as well as renovation plans to determine if the loan is a good investment. If you have bad credit they are more likely than a bank to look past your credit score if you have a sound investment idea. Hard money loans are short term loans primarily designed to fix and flip a property for a profit.

The Truth about Arizona Bad Credit Home Loans

There are many rumors about bad credit and home loans. A bad credit score in terms of obtaining a home loan is classified to be at or below about 640, but this has varied with time and location. However, according to national credit bureaus, the average American’s credit score is around 678, meaning that most people don’t have perfect credit. If you have bad credit, there are a number of events that could have gotten you there that are beyond your control. Divorce, job loss, inability to make mortgage payments due to an over-inflated housing market, and the recent recession are all factors that have negatively impacted may people’s credit scores. Based on the prevalence of bad credit, many lenders are relaxing their loan requirements and it is possible to get a home loan with a score of less than 550, depending on other factors.

If you want to take control of your homeo wnership or real estate investment dreams, stop letting credit hold you back.

Call a licensed Arizona mortgage broker today. A broker can discuss your options regarding bad credit home loans Arizona and help you find the loan to best fit your needs. Stop waiting, call today!

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

The Risks and Benefits of Adjustable Rate Mortgages

The Risks and Benefits of Adjustable Rate Mortgages for Borrowers Seeking Arizona Home Loans with Bad Credit

Adjustable rate mortgages can be an attractive option for borrowers who have bad credit and are looking for different Arizona home loans programs. Knowing the facts about adjustable rate mortgages can help you risk less and make an informed decision.

Adjustable rate mortgages or ARMs are a type of mortgage that is offered by many banks and lenders. An ARM has a fixed interest rate for anywhere from 1 to 7 years, depending on the specific terms of the loan. After the initial term, the interest rate adjusts and increases above the prime rate. This will increase the monthly payment amount because the interest you pay each month has increased. ARMs have gotten a bad reputation in recent years as being dangerous and even predatory. Adjustable rate mortgages were in the hot seat in 2008, largely being blamed for the housing and foreclosure crisis.

Although they have been shown in a less than flattering light, adjustable rate mortgages can still be a good option for individuals looking for Arizona home loans and are especially good for borrowers who may have bad credit. Knowing the ins and outs of adjustable rate mortgages can help make them less risky and protect your investment.

Ways to Risk Less with Adjustable Rate Mortgages

If you are thinking about an adjustable rate mortgage as an option to help you secure Arizona home loans, it is important that you know all the facts. An adjustable rate mortgage will offer you a low monthly payment at first. This led many borrowers to over extend themselves and buy more home than they can afford once they have a higher interest rate. An easy way to avoid this Arizona home loans mistake is to closely examine monthly payments before and after the interest rate reset. You should be able to find out a cap on how high the rate could potentially go and what your payment will be at that rate. If you can afford the payment at the lower interest rate but not the higher one, it is safer to find a less expensive home.

Another way to minimize risk with an adjustable rate mortgage is to work with trustworthy real estate professionals. If you decide to refinance your home before your rate resets, you will need the home to be worth as much or more than when you bought it. An appraiser can help you make sure that you a making a sound investment. Also, a good real estate agent can help you understand housing trends and steer you away from areas of town that may be likely to lose value over time.

A third way to minimize your foreclosure risk is to sell the home before the rate increases. This can be an effective way to make money by fixing and flipping a property for profit. An adjustable rate mortgage will save you money on interest while you are fixing up the property, making the cost of ownership less. Just keep in mind that it is important to be able to sell the property for a profit when you are done. Make sure the home you buy is a sound investment, in a desirable area of town, and the work that it needs is within your budget and skill level. It does no good to end up spending more fixing up a home than you will make when you sell it.

Find a mortgage broker to work for you and get started on the process of qualifying for an adjustable rate mortgage.

Whether you have bad credit and it is the best loan you can qualify for, or you want to save a couple bucks on interest, an adjustable rate mortgage can be a good investment strategy. An Arizona mortgage broker can help you navigate the ins and outs of an adjustable rate mortgage and go over any additional information including down payments, current interest rates, and projected monthly payments.

When you are choosing a mortgage broker, make sure they have expertise in a variety of Arizona home loans products, including adjustable rate mortgages. A broker can be your most valuable tool in qualifying for a home loan because he will fight for you to be approved. He can even get lenders to manually review your application if underwriting rejects it. Find a broker you can trust today to start your journey towards homeownership or real estate investing.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

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.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

You Can’t Have That Arizona Home Loan ! Mom Said No.

You want that Arizona Home Loan to Purchase your Dream Home, But...

I've got an interesting job.  All day long I listen to people’s stories as to why their credit score is down in the low 400 ranges and they want an Arizona Home Loan.  They call and I listen to a point.  It’s usually not their fault as to what happened.  They had a loss of job, had to move, got a divorce, company went out of business, house was upside down,  the mortgage company did an illegal foreclosure (whatever this means) and they end up saying ‘it was not my fault that I am now at a 424 FICO’.  I listen and listen and emphasize with them and say as you know it’s not something that you could have avoided.  It’s really not your fault.  However, being in this business for years I've come to some striking conclusions; they are:

1. The credit score is the King when it comes to a loan approval.  If you’re down at 505, the Mortgage Companies, FHA, VA, USDA really don’t care to listen to your story.  It’s a fact on your credit report and it’s not going away.  Even though some lenders will take a hardship letter of explanation for an Arizona Home Loan this usually does not work.  When you get down to the Nitty Gritty, they don’t care and your mom does not work there.
2. It really was your fault.  You should have had a plan or found a second job, or had sufficient cash reserves to handle the bump in the road.  It’s your fault when you did not pay for the mortgage and the bank foreclosed on you and kicked you out.  When you don’t pay it’s your fault. 
3. When the borrower is told NO, that they will not qualify for that Arizona Home Loan, this news is not new news for them.  They already know the answer

You Can’t Have That Arizona Home Loan ! Mom Said No.

People want to focus in on the problem and not the solution.  They will tell you about their problems in the past and how it’s ruined their life and they will talk to anyone who will listen to them.  They want to say the same thing over and over again, ending the story with ‘It’s not my fault’. And mostly they say ‘it’s not fair.  Why can’t I have this new home?  It’s not fair.  But I want it; I want it, why can’t I have it? I want it. It’s not my fault. It’s not fair’.  You get the picture; they go on and on and on.

So what is the solution for this borrower to 

get the Arizona Home Loan?  

First they need to find the person whose fault it is that put them in this bad situation, track them down and confront that despicable, mean, awful person for putting them in this horribly unfair situation.  They usually can find that person by looking into the mirror.

Second they need to focus on the solution not the problem.  The problem is in the past and you can’t back it up and do a re-do.  I don’t hear a universal backup BEEP BEEP BEEP.  So let’s not linger on the problem, but the solution.  Ask yourself how are you going to solve the problem of a 505 credit score?  When you focus on the solution the problem goes away.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

How to buy a house with bad credit in Arizona - Get your Arizona Home Loan

If you have bad credit you may find yourself wonder How to buy a house with bad credit in Arizona and it may seem impossible. However, there are a variety of loan types and programs that can help you purchase a home in the Grand Canyon State as a primary residence or as an investment.

With sunshine, desert landscapes, mountain trails, hiking, skiing, snow, and majestic views, it is no wonder that Arizona is experiencing a population boom. If you find yourself wanting to move to Arizona, you are in good company. However, if you are one of over 42 million Americans with bad credit, you may find yourself wondering How to buy a house with bad credit in Arizona. You may believe that Arizona Home Loan is beyond your reach and that you are destined to rent forever. That is simply not the case. With new federal programs and a variety of loan types there are many ways to obtain a home mortgage even if you don’t have good credit.

The first step to buying a home with bad credit is to find a mortgage broker you can trust. In Arizona, all mortgage brokers whether they work for a private investment company, a mortgage company, or are self-employed must be licensed. This means that the broker has passed a test as well as completed required coursework. In addition, if the broker works for a company, the company must also be licensed by the state. The state licensure helps to ensure that your broker is knowledgeable about current mortgage laws, rates, and programs.

Once you have found a licensed broker, you should ask them a few questions to make sure that are the right broker for you. First and foremost, you should ask about lender fees. The amount of fees will vary from lender to lender and can have a big impact on your overall closing costs. Secondly, you should ask about turn around times for processing and underwriting as well as general questions about the broker’s experience. You may want to ask how many loans they have helped close as well as what the general interest rate trends are. Thirdly and probably most importantly, you need to ask about new loan programs and How to buy a house with bad credit in Arizona. If you have bad credit, the answer to this question is very important and will help you decide if you have found the right broker for your mortgage needs.

Arizona Home Loan Programs Your Mortgage Broker Should Mention

When you ask about federal mortgage programs and How to buy a house with bad credit in Arizona, there will be a variety of answers but your broker should mention at least three types of mortgages. One type of loan you mortgage investor will most likely discuss with you is offered to bad credit borrowers is an FHA loan. An FHA loan is a government backed loan. Each month you pay extra insurance against default. The loan is secured by the Federal government so lenders are more likely to give them to borrowers with bad credit. In order to qualify for an FHA loan you will need to have 3.5% of the purchase price to put down. You will also pay extra for monthly mortgage insurance which can vary based on the amount of your loan. For many bad credit borrowers an FHA loan is a good path for homeownership.

Another type of loan that is a conventional loan. A conventional loan is a traditional 30 year mortgage with a fixed interest rates. Most current programs require at least at 5% down payment. This is the loan most often given out by banks and is usually the hardest to qualify for with bad credit. However, your broker may know of private equity companies and investors that give out conventional mortgages for sub-prime borrowers. You will usually end up paying a higher interest rate based on your low credit score, but the interest rate is fixed for the life of the loan. Also, if you plan on using on time mortgage payments as a way to rebuild your credit, you can refinance later when interest rates are low. 

A third type of loan your mortgage professional will discuss is an adjustable rate mortgage or ARM. An ARM is a mortgage that has a fixed interest rate for a set period of 1 to 7 years. During that period you will pay a relatively low interest rate, usually lower than the prime rate. After the initial fixed period, the rate will reset to a higher rate and your mortgage payment will increase. Borrowers with bad credit can take advantage of this program as a way to own a home because the initial payments are low due to the low interest rates. Keep in mind that after the rate resets your payment will increase significantly. An ARM is a good option for borrowers who plan on either selling or refinancing before the rate resets.

You may also hear about hard money loans as well as privately backed equity loans if you are planning on using the property primarily as an investment.

If you are looking for an Arizona Home Loan with bad credit, contact a broker today.

A broker can help you navigate the complex world of home loans. Make sure to find a broker you can trust with expertise and experience to help you buy your home.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

Arizona home loan mortgages for bad credit

Arizona home loan mortgages for bad credit: Using Adjustable Rate Mortgages and Other Subprime Loans to Your Advantage

Having bad credit can make it almost impossible to get a home loan but there are lenders that offer programs for  Arizona mortgages for bad credit. There are different options available to help subprime borrowers that can also be taken advantage of by borrowers with good credit.

Close to 42 million Americans have bad credit, which is approximately one quarter of all individuals with active credit accounts. This is defined as a score of less than 640 and can make it difficult to qualify for a car loan, home loan, credit cards, and even store accounts. Some individuals with bad credit scores may even find that they have trouble getting and keeping a job due to credit checks by their employer. For many individuals with bad credit, buying a home seems impossible. However, many mortgage brokers offer Arizona mortgages for bad credit programs to help Arizona residents qualify for home loans.

One type of loan that is available for people with bad credit is an Arizona adjustable rate mortgage or ARM. An ARM is offered to subprime borrowers who would not qualify for a traditional loan. It offers a low interest rate at first but then resets to a high interest rate after a specified period, usually 1 to 7 years. Once the rate adjusts your mortgage payment will increase due to the higher interest rate. This can be a good option if you only plan on owning the property short term or if you know you will be able to qualify to refinance your loan at the end of your low rate period. Although an ARM is a type of Arizona home mortgages for bad credit, it can also be beneficial for borrowers with good credit.

A second type of Arizona mortgages for bad credit that is available is a hard money loan. A hard money loan is secured through a mortgage broker but is backed by investors instead of a bank. This is especially beneficial for people looking to do a fix and flip or short term purchase. Depending on the merit of the property you are purchasing as well as potential for income, investors will often invest capital, even if your credit score is lower than what is ideal. It should be noted that hard money loans are short term loans only. They cannot be used to purchase a home you plan to live in for any significant amount of time. These are designed primarily for real estate investors.

 A third type of loan is a type of FHA loan. An FHA loan is backed by the government and will allow you to borrow about 96.5% of the value of the home you are purchasing. This means that you won’t have to come up with a large chunk for a down payment. In addition, the government backing means that you will be more likely to qualify, even with less than stellar credit. You will pay monthly insurance on your loan. In addition to you principle and interest payments, you will also pay a PMI insurance payment. This will increase the amount of your monthly mortgage payments until you pay off 20% of the loan amount. You can also couple FHA loans with different federal programs that offer down payment assistance or cash back at closing like Home in 5. These programs are constantly evolving and changing, so make sure to talk with a mortgage broker about what you may qualify for.

When Does a Bad Credit Mortgage Make Good Financial Sense?

For some borrowers, an Arizona home loan mortgages for bad credit program is the only option they have to purchase a home. However, some of these bad credit loans can benefit traditional borrowers as well. Specifically, an adjustable rate mortgage. An ARM can save you thousands of dollars in interest over the life of your loan and makes sense in certain lending situations. Here are five situations that could benefit from an adjustable rate mortgage:

1. You have bad credit, but you are working on it. An ARM is a fantastic option to help rebuild your credit score. If you know you will be able to qualify to refinance before the rate adjusts, it is a good way to get into a home and start rebuilding your credit score.
2. You expect your income to increase. If the loan resets, you will be able to pay the higher interest payments because you will be earning more money.
3. You plan to fix up the home and sell it for a profit. If you are not planning a long term investment, an ARM can save you money while you are renovating. In addition, you may also want to look into a hard money loan in this case as they can help investors with bad credit to fix and flip various properties.
4. You expect a windfall. You know you will be able to pay the home off early due to an inheritance. Then the ARM can save you interest while you wait to pay off the home.
5. You plan to sell your home prior to the rate raise. If you only plan on living in your home for a short period of time, an adjustable rate can save you money. If you sell before the rate raises you will never have to pay the higher interest rate.

Talk with a Arizona mortgage broker to determine if an 

ARM or other bad credit loan is right for you.

Whether you need to rebuild your credit or are in a situation where you could benefit by taking advantage of a bad credit loan, a mortgage broker can help you determine the right product for you. A broker or private equity investment firm can help you navigate the ins and outs of Arizona mortgages for bad credit and determine the best next steps to qualify for a home loan. 

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027