According to a recent report from Ellie Mae, closing on traditional mortgages is becoming an increasingly sluggish process, with the average refi now taking 43 days and purchase taking 46. This is the longest close time seen in more than a year, meaning those who need to move quickly are out of luck if going through traditional channels.
The same report notes that FICO scores stand in the way for many people trying to get financing. In all, 71% of those funded have scores that top 700, but the stats are a bit grimmer for those going the conventional route. Just 13% of financing was awarded to those with a 650-699 FICO score and less than 4.5% went to all groups sitting at 649 or below. Overall, the average score of those approved currently sits at 727, yet it’s important to note that the average person doesn’t have a score this high. Even though FICO scores are at an all-time high across America, CNBC says they’ve peaked at 704.
Time and credit scores are major barriers for those hoping to move on the purchase of a home quickly, but these numbers largely reflect the landscape for traditional homebuyers. Those working in real estate investing or who want to grab a great deal on a distressed property and restore it face additional challenges. When lenders are being picky about the traditional markets and raise the bar for criteria like FICO scores, those trying to get funded for mortgages under less-traditional circumstances are edged out even more. This is where Hard Money Loans in Arizona can help.
Regardless of whether you’re an average person who wants to purchase a distressed property with the hopes of turning it into a dream home or you’re a real estate investor, you may have trouble even getting the banks to talk to you at all. However, hard money loans work differently. Your FICO score is not a major deciding factor, but the value of the property you’re looking at is. In other words, simply choosing a home that’s a good deal, be it because you’ve negotiated a lower price or the seller is motivated to unload his junk home fast, will be enough to get your foot in the door.
Conventional financing comes with a lot of red tape because it’s subject to different laws and guidelines than Hard Money Loans in Arizona are, so conventional options take longer to process… and that’s if you’re funded at all. If you’re organized and prepared, it’s not unheard of for alternative funding to come through in a matter of days, making it a great choice for those who need to move quickly or are even struggling due to an “average” or less-than-average FICO score.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
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.