Sub Prime Mortgage Arizona and Your Debt-to-Income Ratio

Before you purchase a home or any other large ticket item, you should look at your current finances. Do you already have a loan that you are paying off? If you do, you may already have significant debt, which can affect your ability to take on an additional loan.

Additional debt may be debt from credit cards, car loans and even student loans. All this additional debt can wrack up the amount of payments you make every month. What about your current income? Is your annual salary enough to cover your bills and save enough for a house? If all of these questions pertain to your situation, you may likely have bad credit as well. Bad credit does not mean you should pass by on buying a home.

Learn to secure a Sub Prime Mortgage Arizona. What constitutes a high debt-to-income ratio and how can I lower it?

Debt to income ratio is something to constantly be aware of when you want to buy a house. An income needs to be high enough that it will cover all monthly expenses. If your income is not high enough for the month, then it may be more difficult to secure a loan. How banks look at it, is that if you are already paying 2/3 of your income each month to bills and general living expenses. Any more than that, then you wouldn't have enough money for a roof over your head.

Therefore is best as a general rule, income must be 3 times the amount that you would pay for a monthly payment on a home. It may not be fair to an individual if they are able to live comfortably if there living costs are higher than 1/3 of their monthly salary, but that’s what lending institutions generally use to qualify others for loans.

It is also in your best interest to put together a budget before you decide to purchase a particular home. Take note of your average monthly salary and decide if the house you are purchasing is feasible. Depending on the amount of savings you have in your bank account, you may be able to buy your favorite home despite having debt.

Money you have available in savings may also lower your debt-to-income ratio. If you have significant savings that can be put towards a down payment, then you would not have to borrow a significantly high loan. It is easier to qualify for a smaller loan if your debt is not outrageous and your income is satisfactory. However not everyone has enough in savings to cover a down payment on the house they want. If that is the case, then it is advisable to look at other options when you have a high debt-to-income ratio.

Do you need a low debt-to-income ratio to secure a Sub Prime Mortgage in Arizona?

The simple answer is no.  If you cannot alleviate your debt or your debt-to-income ratio is less than stellar, there are still options available.

A sub prime mortgage is otherwise known as a bad credit loan. If you have bad credit due to having a high debt-to-income ratio, then you may consider a sub prime mortgage loan. You can apply for a specialized loan for bad credit situations. A specialized loan for bad credit is also commonly referred to as a sub prime mortgage. You do however need to make sure you qualify for a sub prime mortgage. A subprime mortgage in Arizona is easy to qualify for however, the only way to know for sure if you qualify for a specialized loan such as a sub prime mortgage is to speak with a professional lender.

The specialists at Level 4 Funding will help determine your credit situation and point you toward loan options that are 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

Get Approved for a Bad Credit Mortgage Arizona Despite Your Financial Situation

We all know that paying your loans on time is essential if you want to keep a good credit score, as

this is the only way you get another loan or even a mortgage. Credit history is essential when you apply for a mortgage, and this is why you need to ensure that you have a good score. A bad credit will most likely prevent you from getting a new loan since the lenders will fear that you cannot pay.

However you don’t have to worry that much because you can obtain a Bad Credit Mortgage Arizona even if you have a bad credit score, or if your credit history is far from perfect. There are a few ways you can make that happen, and in order to achieve such benefits you need to make sure you have enough cash in reserve. It is best to have enough cash because of a larger down payment that may be required, when applying for a loan with bad credit. Interest rates for loans with bad credit will also have different interest rates unlike traditional loans. However even with these differences, applying for a specialized loan is generally a lot easier and less of a hassle to get approved.

Applying for a bank-approved home loan with bad credit

Before you opt for a standard mortgage loan you should ensure that you check credit reports, as this will help you determine the current situation. Here you can also see if there are inconsistencies or errors, and if that is the case, then you might want to contact the credit company in order to solve the problem.

As a person with bad credit, you do need to expect things such as paying more interest, as banks or other lending institution will consider you a viable person to work with only if they charge you more than usual. In addition, you also do need to show that you have gotten a good job. This shows the bank that you have enough income that will cover all mortgage expenses.

Before you decide to get approved for a typical mortgage loan from a bank, you should try and eliminate all the other debts that you currently have. There’s no way you can receive a standard mortgage if you are still in debt with numerous financial institutions, but if you pay all your debts you do have the chance of getting such a loan. Additionally, if you make a larger down payment, you get a higher chance of having your application for a loan accepted, which is great to say the least! However this is exactly true whenever you apply for a Bad Credit Mortgage Arizona.

If you have a bad credit situation, then within your application you should also try to write down the explanations that bring you all the negative items in front. Tell why that happened and explain the situation, and make sure to say that this particular problem won’t appear again.

What to do if are still not approved for a bank-approved loan due tobad credit

If you are still not able to receive a mortgage despite the advice above, there are other alternatives available that you should consider.

For example there are Bad Credit Mortgage Arizona government programs so you might want to check them out, as they come with a flexible credit requirement that might prove to be helpful. You can also try and look for a cosigner, as this will increase the chances when it comes to getting a much-needed Bad Credit Mortgage Arizona.

The best suggestion however would be to talk to a professional. There are many professionals in the mortgage industry who are more than happy to assist you. At Level 4 Funding we can find the loan unique to your financial situation.

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

Less than perfect Credit Has a Chance for a Hard Money Mortgage

If you are troubled by your less than perfect credit and you need some money for your property, then it might be best to start thinking about some non-traditional loan lenders. If you have heard of Arizona hard money loans before, but haven’t really looked into it, now is definitely the time.

Arizona hard money is unlike traditional loans in that these lenders will not ask you to divulge all your credit scores from the past six years. Instead, Arizona hard money loans are based on the property that you are dealing with. There isn’t half as much hassle or half as much paperwork. Everything is fast and easy. You can have your money so much sooner than what you would with a traditional bank loan.

If you feel like you might be confused between hard money lender Arizona and private money lender Arizona, don’t get flustered. While these terms are used quite often interchangeably, there is a slight difference.

Hard money lender Arizona is a group of people who wish to invest in your property with hard money Arizona. Meanwhile, private money lender Arizona is one person who wishes to invest in your property. You might know this person as they might be someone you’ve invested with before, but there’s a possibility they could just be a new investor interested in giving you your Arizona hard money.

Whichever route you choose, you will be delighted that you went the Arizona hard money way. This is the best way to get the money you need faster than any kind of bank loan and without half of the paper work or even the hassle. Say yes to Arizona hard money today. It could just be the best thing you ever did for you, your bank account, and your property. Don’t hesitate to look into Arizona hard money right this minute.

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

Is a Private Money Lender right for me?

Is a Private Money Lender Arizona right for me?

There’s a great chance you might have noticed that traditional bank loans are getting more and more difficult to acquire. Banks make everything more difficult from the amount of paperwork required to even become possibly eligible for a bank loan to the amount of money they might be willing to give you. That’s where Arizona hard money lenders have come into play to really clean up the mess banks have made and reach out to qualified borrowers who shouldn't have to jump through the bank’s hoops.

As you may have already guessed Arizona hard money does not require any bank participation because they are hard loans, not soft loans, given by unconventional lenders so you don’t have to worry about credit scores like you would with a bank. While these Arizona hard money loans do tend to have higher interest rates, the fast turnaround means that those interest rates don’t really carry any weight since the money is so be paid back so quickly.

Additionally, Arizona hard money is lent out by private money lender Arizona or hard money lender Arizona for people with low credit scores who need money immediately for their properties, either so they can rehab or so that they can purchase or get out of foreclosure. Being that get the money so quickly and the money is paid back fast, the bank seems so old fashioned because you save so much time and energy going with Arizona hard money.

With financial institutions tightening their belts, these Arizona hard money lenders play an important role in our real estate market. Don’t hesitate to check out a private money lender Arizona or a hard money lender Arizona. It could very well end up being the best thing you've ever done for you and your property. Look into hard money lender Arizona and private money lender Arizona 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

Why Get A Hard Money Loans?

Why Arizona Hard Money Loans?

Usually, a loan that you get from the bank is based on your financial history and your credit ‘worthiness.’ This can be painstaking to the typical Arizona hard money borrower. To heavily rely on credit for some means that their loan will not be issued by a bank. When that happens, what are they to do? This is where Arizona hard money comes in.

With Arizona hard money it is much easier to obtain a loan because it is not based on the customer’s past credit score or debt. Instead it is based on the value of the property they want to flip or buy. While this could make the loan higher in interest, the quick turnaround means this doesn't make much of a difference and the Arizona hard money loan could be well worth the chance that it costs extra money. Especially since Arizona hard money loans are so easy to acquire than a traditional bank loan what with their paper work and long wait to see if you even qualify- and you might not- so it could be a big waste of time to even try.

Typically, Arizona hard money loans go to investors who need to snag a property fairly quickly for one reason or another and either wish not to do a traditional loan or they can’t get a traditional loan.  Those who need money quickly are the perfect candidates for Arizona hard money because the loan comes fast and can instantly turn someone’s financial situation around. This is great if you need to avoid foreclosure or if you want to snatch up a property fast.

With two types of Arizona hard money loans available; private money lender Arizona and hard money lender Arizona, a borrower certainly has their options open. Either type of Arizona hard money will get them back on their feet and their property back into their hands.

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

Qualifying for a Stated Income Mortgage

A stated income mortgage can be a valuable mortgage type for individuals who are self-employed or make their living on seasonal employment. Without traditional income verification a stated income mortgage does not require the same documentation of income as a traditional home loan.

When you apply for a home loan, they will look at your financial life under a microscope. You will be asked to provide bank statements, tax records, support documents like W-2s, pay stubs, employer verification, and a host of other financial and personal documents. This is done in an effort by the bank to determine the risks of default of a particular borrower. Since the bank is lending such a large sum of money in a home mortgage transaction, it takes special care to lend to qualified buyers who can repay the loan.

For most people, providing documentation of their income is as easy as sending an electronic copy of their paystub. However, there are certain situations where providing a pay stub is nearly impossible. For these borrowers, it is beneficial to apply for a stated income mortgage. In this type of loan the buyer does not have to provide documentation of his income and is taken at his word as far as how much money he makes.

One situation where a stated income mortgage is beneficial is in the case of being self-employed. A person who owns his own business might not receive the same income each month as his income is based on when business is doing well. Instead of having to provide two paystubs that give only a partial picture of his income, a stated income mortgage allow him to include his income for the year, not just a single month.

A similar situation in which a borrower would benefit from a stated income mortgage is in the case of seasonal employment. Take for example a fisherman who makes the majority of his money in the winter. If he goes to buy a home in the summer, he will not have paystubs to show his earnings. So, even if he makes over $100,000 each fishing season he could be denied a home loan. A stated income mortgage would allow him to use his entire income to qualify for a loan.  In addition to seasonal employment, there are careers with other non-standard income schedules. A Realtor would be a good example of such a career. A Realtor may make $8,000.00 in commission one month, nothing the next, $16,000.00 the third and then nothing for 3 months. Although the agent is making enough money to purchase a home, the instability of her income might disqualify her from obtaining a traditional loan. By using a stated income mortgage she could account for all of her income, even if she isn’t earning any during the current month.

Individuals who earn money from investments can also benefit from a stated income mortgage. Many investors, particularly real estate investors, have a high debt to income ratio. However, because they often own multiple properties their disposable income can be quite high. A traditional mortgage would look at the numbers and the debt ratio and not consider how much income the properties were generating. A stated income mortgage would allow the investor to qualify, even with a high amount of debt due to properties owned.

Arguments against Stated Income Mortgages

One of the main criticisms of stated income mortgages is that they are an easy target for fraud. Since income is not verified using traditional documentation, it is easy for an applicant to overstate his income. For this reason stated income mortgages have been given the rather unflattering nickname of “liar’s loans.” An investigation into stated income loans by the IRS and various lending companies showed that there has in fact been a significant amount of loans where the income claimed for the loan was higher than what was reported to the IRS. Approximately 60% of stated income loans were over-inflated.

Although it is a bit shocking that 60% of stated income mortgage applicants overstated their income, there are a variety of reasons and factors that could have influenced this. The most obvious is that the borrowers lied about their income to qualify for a higher loan amount. This would be especially problematic because it could lead to an increase in loan default and foreclosure rates. Another reason that there could be discrepancy in the two declared incomes could be that what is reported to the IRS is less than what the individual actually made. For example, many servers do not declare tips (although they should be as not doing so is illegal) so their tax income and actual take home pay may be different.

Despite concerns about fraud, stated income mortgages can be a useful tool for borrowers with unstable income.

If you are in a situation where you are having difficulty qualifying for a traditional home loan because of the instability in your income source or difficulty providing proof of income, a stated income mortgage could be a good option for you. Contact a mortgage broker to learn more about all of your home loan options.

Level 4 Funding LLC

Dennis Dahlberg, Broker/RI/CEO

NMLS 1058389 AZMB 0923961

23335 N 18^th Drive Suite 120

Phoenix AZ 85027

623-582-4444

www.Level4Funding.com

What is a Bad Credit and Subprime Mortgage Arizona

A subprime mortgage is one type of home loan that is available to Arizona borrowers with a low

FICO score. Learn all the details of subprime lending to determine the right loan for your unique credit situation.

Although a subprime mortgage can be a valuable tool in helping secure a home loan, many borrowers shy away from them due to recent negative press. Specifically, in Arizona, many politicians have gone as far as to label subprime mortgages as predatory lending practices. They claim that subprime loans are designed to charge high interest rates for people who cannot afford them.  Proponents of subprime mortgage Arizona programs claim that subprime loans allow individuals access into the home marker who would otherwise be shut out due to credit history.

Is a subprime loan a predatory tool used by banks, or is it a legitimate loan program to help bad credit borrowers? In order to answer these questions it is important to examine the actual numbers and statistics related to who is applying and qualifying for subprime and other bad credit loans.

One argument made by politicians against subprime mortgage Arizona is that minority borrower will be discriminated against and only offered high interest loans. A demographic study indicates that this is untrue. By analyzing zip codes and demographics, it was concluded that subprime mortgages are not more common in zip codes with a Hispanic population concentration. 

A second claim against subprime lending is that subprime loans are unfairly given out to borrowers who are young without a substantial credit history. Subprime mortgages are not given out to mostly young borrowers. In fact, the average age of a borrower for a subprime mortgage was between 35 and 55 years of age. This indicates that subprime mortgages are not being used to penalize borrowers with insufficient credit history due to age.

 Finally, another criticism is that subprime lending unfairly discriminates against low income borrowers. This is simply not true, most subprime borrowers in Arizona are above the median income line. Most subprime mortgages tend to be second mortgages that are purchased as investment properties. Subprime borrowers also own fewer low value homes than traditional mortgage holders.

Types of SubprimeLoans and Loans for Bad Credit

Many potential homeowners with low FICO scores find themselves denied by banks when they try to qualify for a mortgage. Nearly 1 in 4 Americans have a FICO score of less than 640 which is considered to be a subprime credit score. With a subprime score it can be difficult to qualify for a traditional home loan. However, there are other options available for a subprime mortgage Arizona. Certain loan types and programs can help borrowers with low credit scores qualify for a home loan.

One loan type that is available to borrowers with bad credit is a subprime mortgage Arizona. A subprime loan refers to a loan given to a borrower that represents a greater financial risk due to his/her credit score. A subprime loan is funded by a bank but does not have to meet the same underwriting guidelines as a prime loan. Subprime loans allow access to groups that would normally not have access to the credit market like people with low FICO scores. The most popular type of subprime loan is an adjustable rate mortgage or ARM. In an ARM, the initial interest rate is usually low but then adjusts after a period of time to above the prime rate. The low interest rate is usually locked in for anywhere from 2-5 years and can be as low as 2.5%. After the lock in period, the rate adjusts and can be as high as 10%. An ARM is a good option for borrowers who know they will have the credit to refinance to a traditional loan after the adjustable period or for borrowers who only intend to live in the home for a short period and sell the property before the rate adjusts.

A second type of loan available for subprime borrowers is a bad credit FHA loan. An FHA loan is backed by the Federal Housing Authority 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 sum of money for a down payment. In addition, the government backing means that you will be more likely to qualify, even with less than stellar credit. This is because the government helps secure the loan for the bank in case of default. One important note is that you will pay monthly insurance on your loan. In additional to you principle and interest payments, you will also pay a PMI insurance payment. This is basically extra money you pay to help insure against default. PMI payments can range from $80 to over $200 each month, depending on the amount of the loan.

When you examine the numbers, it becomes apparent that a subprime mortgage is not used by lenders to make money from the lower class.

Rather, a subprime mortgage is a tool that can help individuals with bad credit access the home buying market. If your credit score is less than 640, don’t lose hope. Contact a mortgage broker to discuss your subprime and non-traditional loan options.

Level 4 Funding LLC

Dennis Dahlberg, Broker/RI/CEO

NMLS 1058389 AZMB 0923961

23335 N 18^th Drive Suite 120

Phoenix AZ 85027

623-582-4444

www.Level4Funding.com