Beware Loaning Money Directly: Use Trust Deed Investing Instead
June 13, 2020SPEC HOME FINANCING WITH ARIZONA HARD MONEY LENDERS
June 14, 2020If you’re worried you won’t qualify for Arizona investment property loans because of your rotten credit, you’ve still got options. However, you won’t find them at the local bank.
FICO credit scores can make or break your eligibility for investment property loans, mortgages, and other financial products, but the bar has been rising, which makes it difficult for mere mortals to qualify. The scale goes from 300 to 850, with scores over 750 considered “excellent,” those in the 700-749 range being “good,” a 650-700 being “fair,” and anything under 650 giving you the big fat label of “poor” credit.
The problem is, new research from CNBC says that banks have been tightening up on credit offerings lately, with 75% of mortgages going to people with FICO scores over 700. The median score is 759, meaning you really do have to have “excellent” credit to qualify now. Not even “good” will suffice anymore. Perhaps what’s more alarming is that the average person now has a credit score of 704. That’s actually pretty awesome, all things considered, but it’s not enough to get most people qualified anymore.
The experts at CNBC say it’s “easy” to improve your credit. Just pay all your bills in full and on time, since payment history accounts for 35% of your FICO score, and get those credit cards paid down. Credit utilization accounts for 30% of your overall score as well, and it should be at 30% or less. For example, if you’ve got $1,000 available across all your credit cards, you shouldn’t owe more than $300 combined. Did you just do the math and realize it will take you years to improve your FICO score enough to start qualifying for traditional loans? So much for “easy,” CNBC “experts.”
Hard Money Can Help You Even if You Have Rotten Credit
One of the most popular tools for those seeking Arizona investment property loans is hard money. Instead of borrowing from the bank, you’ll borrow from a private individual who likes to invest in projects like yours. More often than not, these individuals are people just like you who earned money through fix-and-holds and fix-and-flips, but now have enough of a nest egg that they can finance the work you do. Because this type of financing is structured differently than traditional options and doesn’t come from the bank, the traditional requirements like a top-notch credit score are thrown out the window.
If you’ve got a solid business plan, get a helping hand from private investors.
Because so many of the people now finding Arizona investment property loans were once doing what you are now, they know the ins and outs of the industry. They’re going to expect you to have a solid business plan, have accurate valuations, and have previous experience successfully rehabbing real estate. If the numbers make sense, you’re going to find someone to fund the deal with hard money, even if your credit score isn’t as big as your dreams just yet.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
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.
© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions
