Arizona Mortgages for Bad Credit to Buy a House

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March 17, 2015

Arizona Mortgages for Bad Credit to Buy a House

                Most of us think that many Americans are settled as to where they are living, but the truth is most of them want to live in Arizona. With a wide range of places to choose from, why would they want to settle in Arizona? They choose Arizona because of the following reasons:
  • It has a nice sunny weather for 300 days
  • It is very rich with theater productions
  • The place has maintained its cleanliness
  • There are so many shopping centers, malls, and restaurants to shop and eat from
  • And the landscape provides a lot of outdoor activities for the whole family.
Arizona has been everyone’s dream place to build a home. However despite the reasons above, some people could not reach their goal of moving to the sunny state of Arizona because of their bad credit.

Bad credit is a description of a person’s failure to keep up with their credit agreements and their incapacity to be approved for a new credit. They call it bad credit when it happens several times, which is the same with bad credit mortgages. The only difference between types of mortgages, are higher interest rates and charges. People with bad credit are individuals with the following issues:
  • Bankruptcy in less than 2 years
  • Foreclosure within the last 3 years
  • Low credit scores that are below 620

But luckily for those who want to live in Arizona with bad credit, there are some lenders that have the ability to approve an Arizona mortgage for bad credit. This can help borrowers with low credit score loan a home even if their credit is less than perfect.
Hard Money Loan
These types of loans are usually offered by groups of investors and not the bank. This can benefit new homeowners who are looking for a short-term purchase. Since the lenders are investors, they are more likely to give loans to borrowers with low credit scores. However, hard money lenders can qualify for a loan amount based on the value of the real estate that is used as collateral. The biggest loan borrowers can expect from their lenders would be 65% to 75% of the property value. For example, if the property were worth $100,000, the lender would probably advance 65% to 70% of the property value. This will provide the lender added security if ever the borrower does not pay and they have to foreclose the property.
FHA Loan
This is another type of Arizona mortgage for bad credit loan where the loan is backed-up by the US Federal Housing Administration mortgage insurance, which is provided by an FHA-approved lender. This allows first-time homebuyers and current homeowners to buy a home with less than a 3.5% down payment. Great news for borrowers without a large amount of cash assets! With the government insuring the loan, borrowers end up paying PMI or Primary Mortgage Insurance, which can range from 80 to a few hundred dollars. Using PMI will slightly increase the borrower’s monthly mortgage payment. However they are only entitled to finish this payment until they have paid off 20% of their home loan.
Subprime loans
This loan is given to borrowers who are having a hard time maintaining their payment schedules due to unemployment, divorce or medical emergencies. This loan is characterized by the following: poor quality collateral, higher interest rates and with less-favorable terms to pay off higher credit risks.
                So, what are you waiting for? Arizona is just a loan away from you and your family. With all the types of Arizona mortgage for bad credit listed above, you can choose the right one for your individual needs. Even with a bad credit, your dream of having a home can come true.

Dennis Dahlberg

Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

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