The Real Deal: Why Origination Points Matter when Working With Texas Hard Money Lenders

Origination points exist in all sorts of loan transactions, but many people are unfamiliar with what they are or what they mean. In short, when you’re working with Texas hard money lenders, or any other lender, origination points make a difference in how much you’ll have to pay.

One of the things that gets tossed around when people start discussing the terms of their mortgages or loans from Texas hard money lenders is the number of origination points that comes with the loan. In short, origination points are the fees associated with getting the ball rolling to fund the loan. Each origination point is usually worth one-percent of the loan value, and it’s money that you will have to pay for receiving the originators’ services.

Depending on what type of loan you’re getting, and where you’re getting it from, the formula used to calculate the origination points will vary. Some companies consider how much legwork has to be done in order to get your loan approved. If you have one person running credit checks, background checks, scheduling home evaluations and such, that time can seriously add up, and it may manifest itself as origination points.

Other agencies assign origination points based on the risk associated with loaning to an individual. The more-likely someone is to default, the higher the number of points will be. This makes sense from a work standpoint as well, because lenders who routinely help high-risk clients will often run extra checks to mitigate some of their concerns.

How Many Points Should I Expect to Pay Texas Hard Money Lenders?

Texas hard money lenders base their decision to loan money out mostly on the value of the property. In other words, if you’re not looking for much money, and the property has a high value, it’s pretty much a done deal. This means that the number of origination points can be really low, but it generally doesn’t dip below three, no matter who you work with. On the other hand, it’s not uncommon to see as many as six origination points, and some agencies will actually go as high as eight.

You should know how to evaluate offers from Texas hard money lenders, so you know what to expect.

Obviously, no two Texas hard money lenders are going to handle business exactly the same. It’s important to know how many origination points are on the loan, and, for your sake, see fewer of them on the paperwork. However, they aren’t the end-all. You’ll also need to consider your interest rate, and any other fees an agency might add to the total, as well as how easy a company is to do business with. All of these things will make a difference in how much you pay for the service overall, and will have a huge impact in how satisfied you are after the transaction. Moreover, each company may have multiple packages available, so be sure to speak to a professional if you have questions. 

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
23335 N 18th Drive Suite 120
Phoenix AZ 85027

  

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 38 years. They have 2 beautiful daughters 4 amazing grandchildren. Dennis has been an Arizona resident for the past 32 years.

Is an Interest-Only Mortgage from Hard Money Lenders in Texas Right for You?

An interest-only mortgage can be a helpful tool, but it’s not ideal for every circumstance or individual. While people who flip houses routinely use them, there are numerous other situations when an interest-only loan from hard money lenders in Texas might be the best choice.

As the name suggests, an interest-only mortgage requires that only the interest be paid on it in monthly installments. Although hard money lenders in Texas may restrict this to a year or two, the loans could theoretically go on for an extended period of time. The benefit to this is that the monthly payment is incredibly low. The obvious downside is that the principle of the loan is not reduced at all. If an individual is investing in their home, they’d want to get the principle paid off as quickly as possible. However, there are times when it makes more sense to only be obligated to pay interest.

1.       If your income is unsteady. Typically, people who are self-employed make more than those who are salaried, but the money tends to come in at odd times. When the loan is an interest-only one, people with fluctuating incomes can pay the low monthly rate, and pour money into the principle whenever the funds come in.

2.       If you’re a savvy investor. Generally speaking, the cost of interest is higher than what a person can make investing, but this isn’t always true. If you have a habit of investing incredibly wisely, you may be able to pay down the principle with the windfalls, and just keep up with the interest on a monthly basis.

3.       If you’re planning to move soon. Sometimes, it’s difficult to get out from under a house in time to move into the new home you want. By working with hard money lenders in Texas, you may be able to keep up with two payments, or use equity to fund the down payment of your new home.

There are Many Benefits to Interest-Only Loans from Hard Money Lenders in Texas

Although these three instances are the most-common, there are many times when working with hard money lenders in Texas is the best option. In the situations mentioned earlier, it was more an issue of lack of income. However, when people flip houses, they often use this financing method, too, simply because they’re actively building up the value of the home. In other cases, easy approval even with poor credit is a helpful benefit. It’s really a matter of knowing how to pay off the principle before the term ends, or having a plan to transfer the balance elsewhere at the end. In the financial world, this is called an “exit strategy,” and they’re especially important when dealing with short-term loans.

When in doubt, get advice from an expert on hard money lenders in Texas

Interest-only loans serve a valuable function, but they’re not the best choice in for every circumstance. If you’re not sure if it’s the right option, reach out to an expert with your questions. Regardless of your financial situation, there’s a program that’s designed for people like you.

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
23335 N 18th Drive Suite 120
Phoenix AZ 85027

  

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 38 years. They have 2 beautiful daughters 4 amazing grandchildren. Dennis has been an Arizona resident for the past 32 years.

How to Evaluate a Fix and Flip Before Contacting Texas Hard Money Lenders

The media has sensationalized the rehab and flip business, making it seem like it’s easy cash for anyone who jumps in. The truth is, you have to have a keen eye for investing, and know how to evaluate the home before you get started, especially when you’re using Texas hard moneylenders.

Homes that have fallen into disrepair can be a rehabbers dream. A seasoned pro can size up a home fairly quickly, and make an educated assessment as to whether it will provide a solid return on investment after all the work is complete. This evaluation is often the largest determining factor in whether someone is successful in the fix-and-flip business, so it literally pays to do the research ahead of time.

1.       Calculate what the home will be worth after repairs. To do this, you’ll need to research what comparable homes in the area have sold for over the past 90 to 120 days. They should be in a similar neighborhood, have the same number of bedrooms, bathrooms, and square footage, and also be about the same age. Target an area within ½ to ¾ of a mile from your potential rehab project.

2.       Consider what the repairs should cost. Some re-habbers swear by a $20 per square-foot rule when it comes to cosmetic renovations. However, it’s always wise to bring a contractor on board to verify your estimates before you finalize things, even if you’re going to do the work yourself.

3.       Include any contract fees and the loan costs from your Texas hard money lenders in your total expense estimates.

How to Tell if a Flip Using Texas Hard Money Lenders will Be Successful

Unfortunately, there are no guarantees when it comes to rehabbing and flipping houses. Even experts in the industry get burned from time to time, so you have to exercise diligence, and leave yourself wiggle room. The amount you offer for the home should be enough that after you pay fees, repay your Texas hard moneylenders, and cover repairs, that there’s a tidy sum left to reimburse you for your efforts. It’s wise to build a cushion in when you give your offer, though if you go too low, you could be denied. Equally, having fast access to cash may enable you to negotiate a better deal, so take that into consideration when you make an offer on a property, too.

You should only borrow from Texas hard money lenders if you’ve done the research and you’re familiar with potential rehab pitfalls.

There’s a big difference between making a calculated decision based on knowledge of the housing market, and in making repairs with the hope to turn a profit. Not every rebab is worthwhile. If you’re just starting out, choose the simplest projects, and include professional contractors in your budget. You can test your knowledge in rehabs by scouring a neighborhood, and making your own predictions of what houses will sell for once they’ve undergone renovations. You may also have better success if you find a seasoned rehabber and spend some time working as an apprentice for him. Fix-and-flips aren’t for everyone, and getting started in the industry requires real estate knowledge, as well as a solid background in home repair and estimates. Texas hard money lenders can provide the short-term cash you need to make a deal, but you’ll need to have the knowledge to ensure you’re making a wise investment. If you have these things in your own mental toolbox, fix-and-flips can be incredibly lucrative.

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
23335 N 18th Drive Suite 120
Phoenix AZ 85027

  

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 38 years. They have 2 beautiful daughters 4 amazing grandchildren. Dennis has been an Arizona resident for the past 32 years.

How Hard Money Lenders in Texas Are Helping When Banks Fail

Many people, including real estate investors, often think that a property can only be purchased with money they have in the bank, or through a mortgage loan borrowed from a bank. Realistically, there are many paths to home ownership, and the easiest is often through hard money lenders in Texas.

Everybody needs a place to live, but the traditional system makes it impossible to buy a home, or even rent one, when there’s a blip in your history. Unfortunately, this is the very real situation many Americans face. The economic recession hurt almost everyone’s credit, and has left so many families without housing options, even years after the crisis.

Despite the fact that the nation is still recovering, banks look at all sorts of things, including your credit score, previous bankruptcies, and employment history. If you don’t make the cut, or they think you’re too much of a risk, they refuse to provide a mortgage. Banks will even deny you if your credit is fine, but you happen to be applying at the same time as others with higher scores.

The Urban Institute examines issues like this, and has a specific focus on social and economic policies. The group has been actively researching since the 1960s, and in 2013 they released a huge bombshell. Banks have historically claimed that they only deny about 14% of applications, but the Urban Institute leveled the playing field by eliminating those with perfect or near-perfect credit from the calculations. In doing so, they discovered that the rate of denials is triple the amount banks claim for those with less than perfect credit. Considering that only 0.5% of us may ever achieve a perfect rating, most of us fall into a bracket with a 43% denial rate, which is why hard money lenders in Texas are incredibly popular.

Hard Money Lenders in Texas Give that 43% a Successful Path to Home Ownership

Banks have many rules and restrictions on who they’ll lend to, but when you borrow from hard moneylenders in Texas, the money and the decision are handed down by one person, or a small group of people. This method of lending isn’t restricted by the same guidelines and policies, because the money that goes to fund the purchase of the home comes from sources like personal funds and retirement accounts. Instead of focusing on an individual’s history, the decision on the amount of money needed and the value of the property or assets.

Depending on eligibility, 100% of the cost of your home can be funded through hard money lenders in Texas.

Unlike conventional mortgages, which usually require a down payment, hard money lenders in Texas may be able to give you a loan for the full purchase price of the property you want. This means that it’s much easier to buy a home, and it’s significantly easier than trying to qualify with a bank. It’s worth noting that the people who loan the funds are investors, and they want you to succeed, but they’re also loaning out their personal funds, which means that it can cost a little more. For this reason, many people utilize this option to purchase a home initially, and then secure a traditional mortgage when they can qualify for one at a later date. The additional step is generally of little concern to home buyers, because it enables them to have the keys to their very own home long before it could happen by other means.

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
23335 N 18th Drive Suite 120
Phoenix AZ 85027

  

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 38 years. They have 2 beautiful daughters 4 amazing grandchildren. Dennis has been an Arizona resident for the past 32 years.

Hard Money Lenders in Texas Can Help You Make Money TODAY!

If you are interested in making extra money by investing in real estate or even making real estate investing a full time career, hard money lenders in Texas are here to help. Finding the right lender who will work with you can help you make your dreams come true. 

Real estate investing is a great way to earn extra cash and it can even become a full time job if you are motivated and find the right hard money lenders in Texas. If you have an eye for property renovation and a passion for flipping homes, look no further than a hard money loan to help purchase, fix, flip, and profit from investment properties.

A hard money loan is a specialized, asset based loan that is given by hard money lenders in Texas. It is a privately funded loan that is backed by investor capital, whether it be a single investor or an investment team.

There are several advantages to hard money loans. One of the most appeal for property flippers is that there is a relatively short wait time. You hard money lenders in Texas can get your paper work done, approval fast tracked, and money to you in less than two weeks. You can also usually borrow a significant amount of the purchase price and you can use other assets as collateral to borrow up to 100% of the purchase price.

In addition, hard money lenders in Texas don't go over your finances or credit with a fine tooth comb. The loan is based on the merit of the investment, not your personal net worth or FICO score. This means that even if you have had bad luck in the past, you can still get the Texas hard money  loan that you need.

Once you have your loan in hand you can start fixing up a home and flip it for a profit. Be careful though, you may find that using Texas hard money to rehab and sell homes is addicting!

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
23335 N 18th Drive Suite 120
Phoenix AZ 85027

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 38 years. They have 2 beautiful daughters 4 amazing grandchildren. Dennis has been an Arizona resident for the past 32 years.

Hard Money Lenders Texas Are There When You Need Them!

When it comes to loans, hard money lenders Texas know how to help make your dreams come true. Hard money loans Texas are real estate backed loans that are based on the merit of your investment ideas, not your personal credit score or finances. You can get loans from hard money lenders Texas even if your credit is in the toilet, so to speak. That's because hard money loans Texas are given by private investors. If you want to get a hard money loan, here are a few easy steps to qualify for your loan and get your money.

1. Find a property you want to invest in. Most people choose a fix and flip project to take to their hard money lenders Texas. Choose a good location and a house that is well priced with room for improvement.

2. Do your homework. Make sure you know the fair market value of the renovated house as well as how quickly you think you will be able to sell it. Your hard money lenders Texas like to see that you have a plan to make money for yourself (and them).

3. Create a budget and timeline. Budget for repair costs and have a timeline for completion. This will show your Texas hard money lenders that you are prepared and know what the project entails.

4. Go to your lender to fill out your application and answer basic questions. This is a quick and painless process and requires much less than a traditional bank loan.

5. Get your money, You will usually have cash in hand from your hard money lenders Texas in a couple of weeks.

6. Complete your project and sell the home.

7. Profit! Enjoy your profit and start making plans for your next hard money Texas loan project!

See, it's easy! Hard money lenders Texas want to see you succeed and be part of your success story! So call them today!

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
23335 N 18th Drive Suite 120
Phoenix AZ 85027

How to Make Money With Hard Money Lenders Texas: Tips and Tricks

When it comes to hard money loans Texas, hard money lenders Texas know how to choose hard money lenders Texas borrowers who are going to make smart real estate investments. That's because are in the business of making money, not giving handouts, and you should be too. If you want to start making real estate investments that will have high returns, here are a few tips from the hard money pros.

1. Get hard money loans Texas. Don't use personal funds to fund your entire project. There are a few reasons for this. Firstly, it will most likely deplete your personal savings account, which you may need if the property takes a while to sell or a personal emergency comes up. Hard money lenders Texas will give you a loan with as high as 80% LTV on an investment property. Don't tie up all of your liquid assets when someone is more than wiling to let you use theirs.

2. Pay your loan off as quickly as you can. The faster you can fix up and sell the property, the faster you can pay off your hard money lenders Texas  balance and keep the profit for yourself. You will also make fewer loan payments which means less money spent paying interest.

These are not the neighbors you want!

3. Choose your location wisely. There are many things you can fix about a house, location is not one of them. Do not choose a house in a bad neighborhood and a neighborhood that is on the decline. Really, the best option is to buy the worst house on a nice block. We have all heard it before, but hard money lenders Texas know that in real estate, it is all about location, location, location.

4. Spend your money where it matters. Don't waste tons of money on fancy upgrades that don't matter. When you are picking out fixtures for your fix and flip, always keep in mind that you don't have to live there. Choose neutral, middle of the road fixtures and splurge on things like a new roof or HVAC system. Always keep resale in mind.

Once you are ready to start your fix and flip project, come to us at Level 4 Funding for all of your hard money lenders Texas  needs. We can get you in and out quickly and ready to start your project faster than you ever though was possible.

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
23335 N 18th Drive Suite 120
Phoenix AZ 85027