Wrecked Credit History? Consider Arizona Home Loans with Bad Credit

People can sometimes get caught up with financial issues by tending to apply for unnecessary loans, max-out credit cards or borrow emergency money from lending firms. Due to unexpected expenses, individuals will sometimes have to delay payments or worse, they will default on their debts. Doing so will now cause these people to obtain a very poor credit score.

When the time comes that you need to apply for another loan or you want to apply for a housing loan, you will be in trouble. When applying for a housing loan or a mortgage, lenders and banks are very scrupulous in checking you credit history. These financing agencies will have to dig through all your finances including credit card bills, bank reports, present loans, etc. Before you can get your loan application approved, they will evaluate your financial situation and rate your resulting credit performance.

And yes, because of these unpaid loans and delays in payments, you will likely to tagged as having a wrecked credit history. You will then have to consider applying for Arizona home Loans with bad credit.

Filing an application for a mortgage involves having to improve or clear up your bad credit history. These types of loans are best suited for people with the following issues:

• A very unfavorable credit history
• People who still have existing home loans
• People who are drowning in too much debt
• Borrowers who have huge bills from credit card companies
• People who are caught up in personal loan defaults and amount over dues
• Individuals whose loan applications have been previously declined by other banks and lenders

Applying for Arizona home Loans with bad credit gives people with poor credit history to take advantage of subprime mortgage loans, that enable them to finally get an application approved. However there is a slight catch. Since the lender is the one burdened with higher risk, it will cost the borrower a higher interest rate.

But don't let that stop you. When a subprime mortgage is used responsibly, a lower interest rate may be allowed. The State offers responsible borrowers what they refer to as an Adjustable Rate Mortgage or ARM. This allows the borrowers to enjoy a lower interest rate in a prescribed span of time, specifically 1 to 7 years. After the lock-in period agreed upon, the interest will eventually increase to a higher rate.

Further by using an ARM, the interest rate can be leveraged. The homeowner can have the loan refinanced that will result in a lower mortgage rate, or simply apply for another Adjustable Rate Mortgage.

Applying for Arizona home Loans with bad credit is somethingto be taken seriously. 

If the borrower has another mortgage default, it would really difficult for another loan application to be approved. Make sure you are following the right steps to apply of a mortgage by contacting us at Level 4 Funding. Don't hesitate to give one of our knowledge loan professionals a call. Contact us at 623-582-4444 and speak to one of our friendly associates.

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 Bad Credit Home Loans - Are They Right for You?

Loans have been one of our lifesavers in times of financial trouble. It allows us to have the instant money we need for whatever purpose it may serve. However, the downside of loans is the interest rate that comes along with it. We cannot deny the fact that interest rates on loans could affect the borrowers’ ability to settle it. Yet, many still opt to get loans regardless of the interest rate for important aspects of acquiring a property or for home loans.

One of the loans that most people get with bad credit but still wish to get a home loan is the adjustable rate mortgage or ARM. This is the most common type of subprime mortgage for Arizona bad credit home loans that borrower or buyers can rely on. A subprime mortgage is given to the borrowers with a low credit rating. A person who has a low credit rating is not entitled to receive a conventional mortgage for the reason that they may have a hard time paying the loan back on time. Therefore, a subprime mortgage would be more suitable in case, even if the interest may be higher. To help you ease up in settling the home loan, adjustable rate mortgage is endorsed.

The interest rate under adjustable mortgage rate (ARM) varies in accordance with a certain scale. At first the interest rate is usually fixed for a certain period of time (in-between 1-7 years), and is reset periodically with the rate being adjusted to a higher level at the end of the term. Although ARM had a bad reputation in the previous years as it greatly contributed to foreclosure crisis, borrowers should keep in mind a few important factors. One factor was that these variable-rate mortgages were originally given to borrowers with bad credit that had overextended themselves by buying homes that were beyond their budget. And in addition, once the loan has been reset, they could no longer afford to pay their monthly dues.

However, Arizona bad credit home loans under ARM can still refinance either by a lower fixed rate mortgage or another adjustable rate mortgage. This can be done despite the many adjustments made to rates of an ARM. If you take advantage of the low-interest rate that ARM provides, you will be able to save thousands of dollars on mortgage interest, which will allow you to pay off your loan balance.  You can pay your home loans sooner than expected and significantly less interest will be paid.

A typical mortgage makes you pay the majority of the interest in the first half of the loan’s term. To further avoid the blunders of paying off a costly traditional mortgage, consider a few situations listed below. These tactics will help you realize that an adjustable mortgage rate is much more flexible than the traditional mortgage.

•    Adjustable mortgage rates help you rebuild your credit score. Let’s just say that you have a bad credit score but you’re working on to improve it. ARM is the best option to re-establish your credit score, especially if you’re qualified to get refinancing before the rate adjusts

.

•    Adjustable mortgage rate allows you to save money if you plan to sell your property before the interest rate hikes.  If you plan to be living in your house in a short span of time and have plans to sell it, better do it while the rate is at its lowest. This will prevent you from paying higher interest rates after the reset.

•    Adjustable mortgage rate is the right plan for short-term investment. Most of the people today are in a buy and sell scheme. They bought an old property, have it renovated and then sold it to earn bucks. If the property bought is under ARM this could help you save money as you renovate it, since chances are you’re not going to pay the new interest rate once it has adjusted at the end of the term.

Though some risk can be encountered in Arizona bad credit mortgage with an adjustable mortgage rate enrolled, this can be minimized through smart investments. Keep in mind that overextending in ARM could lead to default or worse, foreclosure. ARM often allows borrowers or buyers to acquire a home that is beyond what they could afford with a traditional mortgage. This is because the lender bases the ability of the borrowers to pay off the monthly dues. However once the rate is reset, the dilemma is in paying off those dues once they arrive. To get the latest gist about bad credit home loans and applicable subprime mortgage, it’s best to talk to a trusted mortgage broker at Level 4 Funding.

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

Real Estate Investing with Bad Credit Home Loans Arizona

Many individuals with bad credit scores believe that real estate investment is beyond their reach. However, with certain types of Arizona bad credit home loans , they can take advantage of investing in profitable Arizona real estate.

Nearly one fourth of all Americans with active credit accounts have bad credit. As a result, they are labeled as subprime borrowers for home loans, car loans, and credit cards. With a credit score below 640, they have a hard time qualifying for credit opportunities. If you find yourself in this position, you probably believe that homeownership and real estate investing are beyond your reach. This is not true. There are certain bad credit home loans Arizona programs that can allow you to purchase a home to live in or as an investment, even with bad credit.

The most common type of loan that allows bad credit borrowers to purchase a home is an adjustable rate mortgage (ARM). An adjustable rate mortgage offers a low interest rate at first for a specified period of time, usually 1 to 7 years. At the end of the term, the rate resets to a higher interest rate and the payments increase. The rates usually start out at less than 3% so it is easier for borrowers with bad credit or high debt to income ratios to qualify. The reset can climb above 5% so it is important to be strategic if you are using an ARM. An ARM makes sense for bad credit home loans Arizona if you are unable to qualify for a traditional loan but you are improving your credit. Making on time payments can help rebuild your credit so that you can qualify for a traditional loan when your rate resets. In addition, an ARM makes sense as a short term investment strategy if you plan on selling the home before the rate resets.

The most important thing to remember with an adjustable rate mortgage is to live within your means. You may qualify for a more expensive house than you could afford with a traditional mortgage. Once the rate resets you will be unable to refinance and might have to go the route of short sale or foreclosure. This hurts your credit score and is what gave Arizona bad credit mortgage loans  a bad reputation. Make sure that you do not overextend your budget and buy more home than you can reasonably afford.

Arizona Bad Credit Loans and Investing

While an adjustable rate mortgage can be an invaluable tool for home ownership, there is a lesser known investment strategy called hard money lending. Hard money lending a type of loan practice that is designed specifically for real estate investments. It is secured by a mortgage broker but backed by an investor or group of investors instead of a bank. The loan is for a short period of time, usually a few months to about 4 years. The goal of the loan is a true investment, for everyone involved to make money.

In order to get a hard money loan, you need to work with a mortgage broker. You would determine a property that you wish to purchase that is a sound investment. Typically these are fix and flip type houses that can build equity quickly. Once you have a property in mind, your broker will connect with a hard money investor or investment team. The investors will examine the merit of the property and the money making potential. They will use this information to determine whether or not they want to invest their capital.

Since a hard money loan is backed by investors, they are more likely to give loans to individuals with bad credit. Instead of only looking at numbers, the investors look at the potential for the property to make money and don’t focus solely on the credit score of the borrower. Once the borrower has renovated the property and sells it, the investors make back their money plus a certain amount of interest. The borrower also makes money on the investment so it is a win/win situation.

A hard money loan can be a valuable tool for bad credit mortgage loans Arizona investing and can help individuals with bad credit take advantage of the many benefits of investing in real estate.

Whether you are looking to purchase a home for your family or to make a real estate investment, there are many programs available regardless of your credit score.

An Arizona mortgage broker can help you decide what bad credit home loans Arizona program best fits your needs. A broker will review your financial situation and long term and short term goals to determine what mortgage product is best for you.

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