When Should I Use Arizona Hard Money?

The question always seems to be when should one use Arizona hard money? This is something a beginning investor would ask, especially when they see how difficult it can be to get a traditional bank loan. Not to mention the hours of paperwork you’d have to do to even be considered for one.

Many who use Arizona hard money are people who need to make a big purchase on real estate very quickly and want the money as soon as possible. They may not have the best credit either, but that’s completely fine because with Arizona hard money, credit scores don’t actually matter at all- just the property that you wish to purchase. You just want enough money to fix up the property or purchase a property. The reward of having instant money and quick turnaround far outweighs the potential interest that you might have to pay.

But what kind of Arizona hard money  do you want to borrow? There are two different types, though they are both similar. One is called private money lender Arizona, which is Arizona hard money lent to you by just one person. This could be somebody that you know or just a new investor who wants to do business with you.

The other type of Arizona hard money is hard money lender Arizona. For this type of Arizona hard money, you have a group of people who offer you a loan, not just one person.

Both types of Arizona hard money are worth the bang for your buck, you just have to decide if it is right for you. Find the kind of Arizona hard money lender that works for you. They are aware of how difficult it can be to make the decision and they are ready and willing to work with 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

Apply for a Stated Income Mortgage and Stop Renting Now!

You've been renting the same unit in a nice downtown area. Rent isn’t cheap but the area is nice and it is close to work. Your friends and family keep asking you when you will get a house. Though you never considered buying a house, you think it would be too difficult to apply for a mortgage. You know banks wouldn't approve of your credit history or irregular income situation. Although you make a comfortable living, enough to afford an expensive high-rise apartment, the bank wants to feel confident enough that you can take on a mortgage. What can you do to qualify for a mortgage then? Instead of dealing with banking institutions that most likely won’t approve of your application for a mortgage, consider applying for a Arizona stated income mortgage.

Besides applying for a Arizona stated income mortgage, there are pros and cons of buying house compared to renting. In this article, we discuss the pitfalls of renting vs. buying a home. We will also take a look at how easy it is to apply for a stated income mortgage that will get you in the house you want.

Renting vs. buying a home

Renting is seen as less of a headache when it comes to home responsibilities. If something in your home breaks, you simply call upon property maintenance. You don’t need to do these fixer upper projects on your own. Also if you plan on moving soon or not sure if your residence will be permanent, than renting is a perfect option. When you have a house, it is a much harder and tedious process to move when the circumstances call for it (for instance, relocating for a job).

Renting an apartment works for some, however there are some drawbacks. Renting can get irritating. There are many problems with renting that people don’t often think about or refuse to acknowledge.

A house generally is larger real estate and allows for more room, then an average rental unit. For instance, a house is more convenient when you have a family of four.

Renting is also often seen as throwing your money away or paying someone else to keep a roof over your head. Consequently by buying your house, you are not throwing money away. Every monthly mortgage payment you make eventually means the property will be yours. As an owner, you are then free to do whatever you want with the property – continue to live in it, sell it or rent it out.

Buying a home is a lot easier with a stated income mortgage

There are usually several hoops to jump through before you get to settle into your new home. After you submit your down payment, you are ready to apply for a mortgage. In order to get the best deal possible when it comes to payments, it is best to speak to a qualified loan professional. This is especially true when applying for alternative types of mortgages, like a Arizona stated income mortgage. However applying for a stated income mortgage, the process is often easier than a standard home loan.

When it comes to applying for a stated income mortgage, you simply state the income you are making. If you have a lot of cash upfront for a down payment, your odds of being approved for a stated income loan are even greater. The best advice is to speak to a qualified mortgage loan professional. These specialists will help you qualify for a mortgage and eventually the house you want to own.

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 8502727

How to Finance a Home with a Stated Income Mortgage

When people think of stated income mortgages, they are often confused. An Arizona stated income mortgage is different compared to a traditional mortgage. While a traditional home loan is lent through a local bank, a stated income mortgage is lent through a private lending company. In this post we will take a look at whether a stated income mortgage is right for you and your situation. Additionally, we will discuss how a stated income mortgage works and where to find one.

Are you a candidate for a stated income mortgage?

Take from this situation: You found a home you really want. You have enough money saved for a down payment, but you need to find an institution that will lend you the additional amount of the house. Who do you lend from and more importantly, would you qualify as a borrower?

Well, it depends on your employment status, credit history and other past financial decisions. In a typical qualification process, the borrower must reveal his/her income and current employment. However there may be situations when you may not wish to use your employment status to qualify for a mortgage loan. You may be self-employed, like for instance, a contractor or insurance agent. Due to the ups and downs of income, it is hard for a bank to label you as a “low-risk” borrower. At this point you should look at another type of mortgage, known as a stated income mortgage.

A bank does not lend stated income mortgages. Instead they lend standard or traditional mortgages, which means that in order to be approved you must retain their requirements. A banking institution’s requirements for a home loan vary slightly between banks, but for the most part requirements are the same. For a typical loan it is ideal to have a standard paycheck from an employer, a long-term credit history and a high credit score. If you do not possess the requirements necessary to obtain a loan from the bank, there are other ways in which to get a mortgage.

How does a stated income mortgage work?

The best way to find out how a stated income mortgage works is to speak to private lenders. There are many different types of private lending. Some private lenders are individuals while others are rather large companies. There is really no difference in whether a private lending company is large or small, however it is important that you are comfortable with your lender. Also when searching for a private lender, be aware of the advice you are given and whether they specialize in the area of home loans. Better yet, make sure the company or individual you are dealing with specializes specifically in stated income mortgages.

Where do I find a stated income mortgage?

A company that specializes in stated income mortgages is Level4Funding. Not only do the people at Level4Funding knowledgeable in the area of stated income mortgages, they will help you buy the house you really want. Don’t delay. Call us today at 623-582-4444!

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

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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

Sub Prime Mortgages Arizona: Predatory Lending Practice or Sound Financial Strategy?

Subprime mortgages in Arizona have been considered a predatory lending practice by many law makers. The facts show otherwise as subprime mortgages Arizona have typically been used by investors as a money making strategy, not by people who have been taken advantage of by banks.

A subprime mortgage is a lending practice that can benefit borrowers with low credit scores. Typically, subprime mortgages are given to borrowers with a less than stellar credit history or to borrowers with other financial factors that make them too much a liability for a traditional loan. Usually subprime borrowers have a credit score of less than 640, which is considered a poor score. Based on these factors, the borrowers would not qualify for a traditional mortgage so banks give them a subprime loan with a higher than average interest rate. Because subprime borrowers represent a higher risk for the lender, most lenders charge a higher than prime interest rate.

The most common type of subprime mortgages that are offered are adjustable rate mortgages or ARMs. An adjustable rate mortgage initially offers a very low interest rate, usually below the prime rate offered by a traditional loan. For an informed investor who intends to fix and flip or only own a home for a short period of time, an adjustable rate mortgage can be a great investment tool. However, an ARM is somewhat misleading to uninformed borrowers as it initially charges a lower interest rate. After the ARM period the rate adjusts to a significantly higher rate and higher monthly payment. In addition, ARMs allowed borrowers to purchase homes that were too expensive for them to afford with a traditional mortgage, making it impossible for them to refinance to a fixed rate. These types of mortgages were given out frequently by banks to un-creditworthy buyers in 2005 and 2006. Once the loan reset to the higher interest rate, many borrowers were unable to afford their new monthly payments and defaulted on their home loans. ARM were largely responsible for the increase of subprime mortgage foreclosure increases in the mid-2000s.

In response to the foreclosure crisis, may law makers want to eliminate sub prime mortgages Arizona entirely. They cite these types of loans as being predatory lending practices as the interest rates can reach as high as 9% when a traditional loan hovers around 4%. They also claim that these loans are disproportionately given to people who make less than the median level of income and there is also fear that subprime mortgages could hurt minorities or young people.

Facts about Subprime Lending in Arizona

There is somewhat unfounded concern among law makers that sub prime mortgages Arizona are designed by banks to gain the most money from groups who have the least. The foreclosures of the mid-2000s helped fuel this fire. Politicians  make a variety of claims about the risks of sub prime lending in Arizona, however, many of these claims are simply not true.

The first assertion by politicians looking to discredit subprime lending in Arizona is that sub prime mortgages 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 sub prime lending is that it unfairly discriminates against low income borrowers. This claim is categorically false. In fact, 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 tend to own fewer low value homes than traditional mortgage holders.

Finally, another criticism 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.

Subprime mortgages are not being used by banks to unfairly discriminate against borrowers, ratherthan are a valuable tool for borrowers with low credit scores or as a means to purchase an investment property.

Since subprime mortgages often reset to higher interest rates, they have unfortunately been lumped into the same category as title or payday loans. Some politicians see them as predatory practices without having all the facts. Sub prime mortgages Arizona are a tool that can be used for borrowers that would otherwise not qualify for a mortgage. As long as the borrower is informed about the risks, a sub prime mortgage can be an invaluable tool to help them purchase a home or investment property. Contact a local mortgage broker to determine your options and see if a subprime loan is a good option 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

Using an Adjustable Rate Mortgage to your Advantage

In recent years, sub prime mortgages Arizona have earned a bad reputation. However, they can be a good option for borrowers to save on interest and insurance costs.

A subprime mortgage is a loan given to a borrower who is considered to be a higher risk due to a poor credit score. Typically a subprime borrower has a credit score of less than 640, but this does vary. Since the lender is assuming a higher risk, the interest rate is also generally higher. Critics of subprime lending argue that it charges unfair interest rates and further burdens individuals with low incomes and high amounts of debt. However, for many individuals, sub prime mortgages Arizona are the only way they can qualify for a home loan.

The most common type of a sub prime mortgage is an adjustable rate mortgage or ARM. An ARM starts off at a low interest rate, usually lower than the prime rate around 2-3 percent. After a period of time from 1 to 5 years, the rate then adjusts to a much higher rate anywhere from 5 to 10 percent, depending on market conditions. This will cause your payment to go up rapidly. ARMs got a bad reputation during the housing crisis of the mid 2000s and were accused of being a way for banks to loan money to and take advantage of subprime borrowers. Many people lost their home due to the inability to make the new, higher payments after the rate adjusted.

Adjustable rate mortgages have been attacked by both talk news show hosts and some financial advisors who claim this type of loan is single handedly responsible for the foreclosure crisis and subsequent economic recession. This however, is too simplistic of a picture and throws the baby out with the bathwater, so to speak. While there are risks to sub prime mortgages Arizona, there are also benefits to ARMs that can be taken advantage of by both sub prime and high credit borrowers.

Benefits of an Adjustable Rate Mortgage

For many people, a traditional mortgage actually costs them money and simply does not make sense. Most people do not live in a home for 30 years, in fact the average time frame is 8 to 10 years. Even if they stay for longer, most people end up refinancing their mortgage at least once and some people refinance every 2 to 3 years. This ends up costing a significant amount in interest because in traditional home loans, you pay the majority of you interest during the first half of the loan term. Also, traditional 30 year loans charge a higher interest rate as a type of insurance for the lender. The lender assumes you will take 30 years to pay off the debt. 30 years is a long time and there is a chance that something could happen that would cause you to default. The lender charges you a higher interest rate to earn more money to keep as a type of insurance against default. The terms on an adjustable rate are only about 1 to 5 years so they can offer a lower interest rate since the term is shorter and less risky for the lender. An adjustable rate mortgage has a much lower interest rate than a traditional mortgage which can save you thousands of dollars over the loan term.

Although the rate of ARMs does adjust with time, you can always refinance to either a lower fixed rate mortgage or even another adjustable rate mortgage. Taking advantage of the lower interest rates of an ARM could save you thousands on mortgage interest, giving you more money to pay off the balance of your loan. As a result, you can pay off your home sooner and pay significantly less interest.

The most important piece of advice regarding ARMs, is to never overextend yourself. Many people bought homes that were otherwise out of their budget by taking advantage of the low interest payments offered by an ARM. Once the rate reset, they were unable to afford the home and could not refinance to a fixed rate mortgage because the home was out of their budget. Make sure that you budget for payments with an increased interest rate and buy a home that you can actually afford.

                               

Talk to a mortgage broker to determine if an adjustable rate mortgage makes sense for you.

Although there are many benefits to an ARM, there are also risks. Amortgage broker can help you navigate the ins and outs of ARMs and other sub prime mortgages Arizona. Make sureyou know all of your options to help save money and make smart mortgage decisions.

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