If you have poor credit or a blemish on your financial history, a traditional bank loan might not be an option for you. Don’t worry — Arizona owner occupied hard money loans might still be an option to get you in a home.
If you’ve been turned down for a loan by the bank, you might be interested in alternative funding options. Let’s look at some pros and cons so you can decide if it’s for you.
1. What are they? Hard money loans are loans that are secured with collateral. Rather than look intently at a borrower’s credit score and financial history, hard money lenders use the borrower’s property to cover the risk of lending the money. This makes them easier to qualify for and faster to get than traditional bank loans.
2. Can they be used to buy a family home? Most people think of hard money loans when they think of fix and flips or rental properties. However, these types of loans can also be used by people who intend to buy a home and live in it.
3. How do Arizona owner occupied hard money loan differ from regular hard money loans? In a hard money loan for a fix and flip or investment property, the borrower traditionally sells the property for a profit and repays the loan. If the borrower doesn’t intend to sell the house, the requirements may be a little different.
4. What are the rates? Because of the risk for the lender, the rates for these types of loans are typically a little higher. Most range between 6-12%.
5. What are the extra requirements? Since there’s not an investment property put up as collateral, borrowers may be asked to provide W2s, tax returns, pay stubs and proof of any debts.
Since the financial crisis and the Dodd Frank Act, which tightened lending regulations, many hard money lenders stopped doing these loans. The ones who still do them often ask for more documentation and may have stricter requirements for giving them out.
While we do less Arizona owner occupied hard money loans than before, we still have them available. Depending on the circumstances, we can accept co signers, do 100% financing and offer interest rates as low as 9.5%. If you’re interested in using alternative funding to get into your own home, give us a call today to see what we can do for you.
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.