How to buy a house with bad credit in Arizona

Adjustable Rate Mortgages and FHA Loans: How to buy a house with bad credit in Arizona

If you are have bad credit, you have probably found yourself wondering How to buy a house with bad credit in Arizona. It may seem hopeless, however thanks tospecific federal programs and special mortgage loans home ownership can bewithin your reach.

If you have bad credit, you have probably been turned away by a bank if you applied for a home loan. You may think that owning a home is impossible. However, there are a number of programs that can help you qualify for a home loan. The best first step is to ditch the bank and find a company that specializes in helping individuals and families figure out How to buy a house with bad credit in Arizona. A good first stop is a mortgage broker. Unlike a bank, the broker does not actually loan out the money for a home loan. Instead he shops different banks to help you find the best loan for your purchase and credit situation. This allows more flexibility in terms of the types of loans that the broker can find as well as lenders. A mortgage broker or mortgage company can act as your intermediary and usually get you better loans and better terms than you could get by going straight to a bank, especially if you have bad credit.

Once you have found a mortgage broker or private mortgage company, you will begin to figure out How to buy a house with bad credit in Arizona. Your mortgage professional will give you a variety of options including conventional loans, FHA loans, and adjustable rate mortgages. It is important that you understand the differences in the types of loans as well as the terms of the loans to help you make the best decision for how to purchase your home.

Types of Bad Credit Loans in Arizona

One type of loan you mortgage investor will most likely discuss with you 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.

Another type of loan that 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 home ownership.

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.

Stop asking yourself How to buy a house with bad credit in Arizona and find a Arizona Mortgage Broker to help answer that question today.

Although these are a few types of loan available for bad credit borrowers in Arizona, there are many other options like private and hard money loans. In addition, state and federal programs change frequently so there are always new paths to homeownership. Stop letting your credit score stand in the way of owning your dream home. Contact a mortgage broker or investment firm to take the next steps in find the perfect home for your family, and the perfect home loan for your wallet.

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

Taking a Look at Arizona Homes - loans for bad credit

Bad credit is one of the deciding factors whether an institution will grant you a home loan or not. A bad credit rating is an indication of an individual’s credit history, which specifies that the borrower is carrying a higher credit risk. This can be identified by the low credit score based on the credit history of an individual. The credit history of a person depends on several factors such as the amount borrowed, the availability of the credit amount remaining and the borrower’s punctuality in payments. An individual will only gain bad credit if they're unable to make payments on regular basis or fail to pay a loan for a specified length of time. And if you have a bad credit that most likely means you will have a hard time dealing with payments and have a difficult time obtaining loans from financial agencies.

Although an individual had already filed for bankruptcy or have gone through a foreclosure, most cannot deny the fact that a home is a basic necessity. This thinking pushes people to look for ways to retrieve a home loan just to secure a shelter for their family, no matter how costly the downsides. Downsides such as the number of years and odd jobs prospective homeowners must obtain to take to afford a new home. However the best option to consider would be to look for Arizona homes loans with bad credit using from various agencies. Specifically loan agencies that offer subprime mortgage options.

A subprime mortgage is a type of mortgage that is usually provided to borrowers that have higher risk because of a poor credit score. Individuals with credit score lower than 640 are most likely entitled to a subprime mortgage. Yet with the great risk lenders assume from borrowers, the interest rate is expected to be slightly higher. And though many critics find interest rates on subprime mortgages to be unfair, many borrowers defend this notion for the reason that it is the best option available to qualify for a home loan.

Aside from this, borrowers can choose from several different types of subprime mortgages available. Each type of loan has strong and weak points, especially if new homeowners plan to apply for Arizona homes loans for bad credit such as:

• Adjustable Rate Mortgage (ARM) – This type of mortgage starts at a low-interest rate that is typically in a lower prime rate of 2-3%. This will be adjusted after 1 to 5 years to a much higher rate, with 10-20% depending on market conditions. However an ARM is the good choice if you are in the process of rebuilding your credit score. You will be able to refinance a traditional loan even before the period of adjustment. In addition an ARM is considered a smart alternative if you are planning to buy a short-term home, whether as a 'fix and flip' real estate investment or if you have plans to move out on short notice.
• Hard money loan – This type of loan is offered through a group of investors to borrowers, not through a traditional bank. This short-term loan is designed specifically for ‘fix and flip’ real estate. A hard money loan only lasts for a couple of years.
• FHA insured loan – This loan is backed by the federal government and offers low interests rates for borrowers. A FHA insurance loan also provides options for low down payment. It only requires 3.5% down payment, which makes this loan a great option for borrowers with little to no amount of liquid cash resources. Borrowers should also consider this type of loan if the first home is sold and a second home is purchased with no down payment in hand. Also since the government insures the loan, the borrower will only pay the primary mortgage insurance (PMI). The payment ranges between 80 and a few hundred dollars that could increase your monthly mortgage dues dramatically. And the payment is done until you had paid the 20% of your home loan.

Provided that there are many options available for Arizona homes loans for bad credit is to talk with a mortgage broker. Specifically, the friendly professionals at Level 4 Funding are very knowledgeable about the current trends in housing loans and mortgages. We will dissect your individual financial situation and help you qualify for the loan of your choice.

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

Arizona Hard Money Might Be the Choice for You

If you are looking for a way to get the money you need for a property you want to purchase, then Arizona hard money might be the right thing for you. Forget the traditional bank loan that can cause such aggravation. You don’t need to wait around for your money or deal with heavy paperwork. You can have your Arizona hard money quickly without hassle and without any annoyance that a bank might give you.

As banks tighten up their vaults, customers like you really miss out because these banks aren't willing to take the risk. They want to keep their money, so even if you do get a bank to give you a loan, you may not get the amount you want or even need to make the purchase that you need on the property that you want to either revamp or flat out buy. You shouldn't have to be at the beck and call of the bank, you should be able to get your Arizona hard money loan and be on your way.

Arizona hard money does not actually require you to sign up with the bank.

An Arizona hard money loan is independent of banks and can be distributed by either private moneylender Arizona or hard money lender Arizona. 

They are both similar kinds of loans with only a few differences. For one, private money lender in Arizona is just a one person loan. The person who gives you the loan could be somebody that you know or it might just be a private investor who isn't associated with a bank. Meanwhile, a hard money lender Arizona is a group of people who want to make an investment. Whichever you choose, we know that Arizona hard money will help you get the property that you want right now.

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

Hard Money Loans: Arizona Bad Credit Home Loans for Real Estate Investing

If you have bad credit and are looking for Arizona Bad credit home loans, a hard money loan can be a valuable investment tool. Taking advantage of hard money lending can allow bad credit borrowers to take advantage of real estate investment opportunities.

If you have a credit score of 640 or less, chances are that you will be denied a home loan from a traditional bank. For many sub-prime borrowers, the idea of homeownership seems beyond their reach and real estate investing is out of the question. However, there are certain Arizona Bad credit home loans that allow borrowers with bad credit to make real estate investments to help build their personal wealth.

One type of real estate investment loan available to bad credit borrowers is a hard money loan. A hard money loan is a type of asset based loan financing that is secured by real property. Hard money loans are issued by private investors or companies that specialize in hard collateral loans. The lender offers short term capital loans to purchase investment properties. The term of a hard money loan is generally no more than two years although it is possible to find hard money loans that have terms of up to 10 years. This type of loan is designed to make money on real estate for both the borrower and the lender. Hard money lenders focus on the value of property being purchased rather than the assets or credit score of the borrower. For this reason a hard money loan is an invaluable opportunity for an investor looking for Arizona Bad credit home loans to purchase a property as a short term investment.

Hard money loans are available for all property types including commercial, residential, multi-family, and even land loans. Each lender or group of lenders determines the requirements for what types of loans they will give as well as how much money they will lend. If the lender gives loans on residential properties he/she/they are required to be licensed through the National Mortgage Licensing System (NMLS). In order to sure that the lender you are using meets all requirements, it is best to use a broker or investment team that specializes in hard money lending.

Hard money lending has less regulations that traditional loans so it is a good option for borrowers needing Arizona Bad credit home loans due to a low credit score. A hard money lender looks at the merit of the investment, not the credit score of the borrower. If you are obtaining a hard money loan for a residential loan, you will still be required to show proof of income though it is usually less stringent than traditional bank requirements. In addition, the investors in a hard money situation look at the value of the investment, not the credit score of the borrower, making it an ideal loan for a bad credit borrower to purchase a fix and flip and make a profit from buying and selling real estate.

Property Types and Interest Rates

Hard money loans are available for multiple types of property. You can a hard money loan for a residential property, commercial property, multi-family property, and even vacant land. Residential hard money loans are the most highly regulated type of hard money loans. To give residential loans hard money lenders must be licensed and are required to ask for proof of income. Commercial property hard money loans are exempt from these requirements.

Interest rates for hard money loans are usually higher than other loan types. The interest rate is dependent on the lender as well as market conditions. Rates usually hover around 11% but have climbed as high as 21% in the past. The higher interest rates are due to the higher risk assumed by investors in this type of Arizona Bad credit home loans program. In the event of default, the lender’s investment is secured by the real estate that the borrower purchased. The lender can sell the property to recoup its funds.

It is important to remember that a hard money loan is designed specifically for real estate investing. The interest rates are too high to make it feasible as an option to own a property for a significant amount of time. Ideally if you purchase a property using a hard money loan you should sell it for a profit within a couple of years. Once you have paid back the loan amount, you get to keep an additional profit.

Talk with a mortgage broker today about hard money loans.

Hard money loans can be a great tool to help borrowers with bad credit take advantage of real estate investment opportunities. It is important to work with a broker experienced in hard money loans and lenders. In addition, you want to make sure to work with a trustworthy real estate agent and accurate appraisal company.

If you are ready to take the next step in growing your personal wealth with real estate investing, don’t let bad credit hold you back. Talk with a mortgage broker about securing a hard money loan 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

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 Truth about Getting an Arizona Mortgage with Bad Credit

If you are trying to get an Arizona mortgage with bad credit, it is important that you know all of your options. There are several programs available to help Arizona borrowers obtain a home mortgage, even if they have bad credit.

If you have a credit score of less than 640, you are considered a sub-prime borrower in terms of credit worthiness. This can impact your ability to obtain a home loan, care loan, or even a store credit card. You may feel like there is no way out of your situation. However, you are not alone. Nearly 42.5 million Americans have sub-prime credit. In addition, the average credit score is about 678, meaning that the average American has less than stellar credit.

If you find yourself being denied a home loan due to your credit score, there are a number of options to help you find an Arizona mortgage with bad credit. One loan type that is available for borrowers in the market for an Arizona mortgage with bad credit 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.

Adjustable Rate Mortgages, FHA Loans, and Hybrid Programs

Another type of loan a borrower in Arizona with bad credit might consider 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 loan that can help individuals looking for an Arizona mortgage with bad credit 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.

A less well known type of loan for borrowers with bad credit is an FHA hybrid loan. This loan type combines the government insurance of an FHA loan with the low interest rates of an ARM. This loan does not require as large of a down payment as a traditional ARM and there are also limits on the amount that your interest rate can increase once the rate resets. The Federal Housing Administration controls the market conditions of these loans to make sure that even when it resets to the higher amount, the payment does not rise as significantly as with a traditional ARM.

If you have badcredit and are in the market for a home loan, talk with an Arizona mortgage broker to discuss your options.

A home loan can be a great way to rebuild your credit and put you on the path to having more borrowing capacity. If a home loan seems like a good option, talk with a broker to discuss the specifics on the loan type you are applying for and to find the right program and loan 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

Arizona Homes Loans for Bad Credit Borrowers: FHA and ARM Hybrid Loans

If you are in the market for Arizona homes loans for bad credit borrowers, you might want to consider and FHA hybrid loan program. This loan type combines the benefits of an FHA loan with an adjustable rate mortgage to give borrowers the best of both worlds.

If you have bad credit, a home mortgage is a valuable tool for rebuilding your credit, but it may seem almost impossible to obtain. Most banks will turn away borrowers with a credit score of less than 640. However, nearly 25% or 42.5 million credit using Americans fall into this category. If you find yourself searching for Arizona homes loans for bad credit borrowers, you might want to look into an FHA loan.

The Federal Housing Administration is a government agency that is responsible for helping to insure home loans. In order to qualify for an FHA loan, an applicant must make apply for and receive financing from an FHA accredited lending institution. The Federal Housing Administration then insures the lending institution against loss in case the borrower fails to pay their mortgage on time. The borrower pays an insurance premium for this service of 1.75% of the loan amount upfront (usually financed into the loan amount) as well as monthly PMI payments. In order to qualify for an FHA the borrower also has to make a 3.5% down payment at closing.  This is a good option for borrowers who cannot afford a traditional 20% down payment or who have less than perfect credit. Banks and other lenders are more willing to lend to bad credit borrowers who qualify for an FHA loan because the borrower is insured against default.

Another type of loan that can help Arizona homes loans for bad credit borrowers 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. One of the greatest risks of an ARM is that borrowers will not be able to make monthly payments once the interest rate increases.

FHA Hybrid Loans

A third, less well known type of bad credit loan is an FHA/ARM hybrid loan. The FHA will insure adjustable rate mortgages. This allows bad credit borrowers to take advantage of low interest rates. This interest rate is adjusted annually, based on market indices approved by FHA, and thus may increase or decrease over the term of the loan.

The FHA Hybrid provides for an initial fixed interest rate for a period of three or five years, and then adjusts annually based on market conditions and the terms set by the FHA. The FHA Hybrid loans allow up to a 1% annual interest rate adjustment after the initial fixed interest rate period, and a 5% interest rate cap over the life of the loan. The new payment after an adjustment will be calculated on the current principal balance at the time of the adjustment. This insures that the payment adjustment will be minimal even on a worst case rate change. This is preferable to a traditional ARM because it helps keep the payments relatively low, even when the interest rate increases.

For many lenders the FHA hybrid is preferable because it still allows the loan to be insured against default. For this reason it is also a better option for Arizona homes loans for bad credit borrowers because they will be more likely to qualify for this type of ARM. Finally, the hybrid ARM does not require the 10% down payment that a traditional ARM does. This makes it more ideal for borrowers without several thousand dollars in savings.

If you have bad credit, you might want to investigate an FHA hybrid loan to determine if it the right path to homeownership.

Call a mortgage broker to discuss your home loan options and determine if an FHA hybrid product is right for you. Federal programs change regularly and a broker can help ensure that you choose the best mortgage product for you. Don’t continue to let your bad credit hold you back. Find an Arizona mortgage broker 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