How Arizona Hard Money Loans Work

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How Arizona Hard Money Loans Work

(Most borrowers are unaware that Arizona Hard Money Loans are even available. And those who have heard of them don’t know how this lending tool works and what it can be used for.)

Arizona Hard Money Loans are short-term loans that are funded by a private lender. These loans are sometimes called bridge loans because they can be used to bridge the time between two financial transactions or to make a short-term purchase. The loans are very different from the traditional loans offered by banks and mortgage companies, and they offer some very different advantages and disadvantages.

Hard money is a legitimate business and is operated by individuals or small groups who are not burdened by all of the rules and regulations of a traditional lender. There are rules for this type of lender, but they are not as stringent as bank regulations. The hard money lenders base their loan approval on the value of the collateral that the borrower is willing to offer for the loan. In most cases, this collateral is the property that is being purchased. For this reason, another name for these loans is an asset-based loan.

What makes this type of loan appealing to borrowers is that the loan is not actually based on the borrower’s credit score or creditworthiness as much as it is based on the collateral value. That is not to say that the lender does not consider the borrower’s ability to repay the loan, but a credit score is not as critical an issue as it is in the case of a traditional loan. So often times a consumer with poor credit or no credit history can borrow from a hard money lender when a traditional bank rejected their loan application.

The Terms of Arizona Hard Money Loans

As mentioned before, these are short-term loans of about a year normally. In some cases, the loan can be paid off early without any early repayment penalty. In addition, the loan amount is only going to be available up to a specific percentage of the collateral’s value. In most cases the highest a lender will go is 80% of the collateral value. This provides the lender some security in the event of the borrower defaulting on the loan. That 20% equity means that the collateral will almost always be worth more than the balance due on the loan.

A Legitimate Option

Arizona Hard Money Loans are a legitimate option for many borrowers who are unable to finance a traditional loan or mortgage. The terms of private lender can also work in favor of the lender when structuring the repayment schedule. But borrowers need to be aware that there is always a price to borrowing money, and the hard money lender is going to charge more interest than a bank or other traditional lender. It is also important to understand that the loan agreement for hard money is legally binding, and if the borrower fails to make the payments, then the lender can take possession of the property or any collateral used to secure the loan.



Dennis Dahlber Broker Ri CEO Level 4 Funding LLC
Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC 
Hard Money Lender

Hard Money Loans

Hard Money Loan

Arizona Tel:  (623) 582-4444

Texas Tel:      (512) 516-1177

Dennis@level4funding.com

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.

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