How to Evaluate a Fix and Flip Before Contacting Texas Hard Money Lenders
November 21, 2015The Real Deal: Why Origination Points Matter when Working With Texas Hard Money Lenders
November 21, 2015
An interest-only
mortgage can be a helpful tool, but it’s not ideal for every circumstance or
individual. While people who flip houses routinely use them, there are numerous
other situations when an interest-only loan from hard money lenders in Texas might be the best choice.
As the name suggests, an interest-only mortgage requires
that only the interest be paid on it in monthly installments. Although hard money lenders in Texas may
restrict this to a year or two, the loans could theoretically go on for an
extended period of time. The benefit to this is that the monthly payment is
incredibly low. The obvious downside is that the principle of the loan is not
reduced at all. If an individual is investing in their home, they’d want to get
the principle paid off as quickly as possible. However, there are times when it
makes more sense to only be obligated to pay interest.
that only the interest be paid on it in monthly installments. Although hard money lenders in Texas may
restrict this to a year or two, the loans could theoretically go on for an
extended period of time. The benefit to this is that the monthly payment is
incredibly low. The obvious downside is that the principle of the loan is not
reduced at all. If an individual is investing in their home, they’d want to get
the principle paid off as quickly as possible. However, there are times when it
makes more sense to only be obligated to pay interest.
1.
If your income is unsteady. Typically, people
who are self-employed make more than those who are salaried, but the money
tends to come in at odd times. When the loan is an interest-only one, people
with fluctuating incomes can pay the low monthly rate, and pour money into the
principle whenever the funds come in.
If your income is unsteady. Typically, people
who are self-employed make more than those who are salaried, but the money
tends to come in at odd times. When the loan is an interest-only one, people
with fluctuating incomes can pay the low monthly rate, and pour money into the
principle whenever the funds come in.
2.
If you’re a savvy investor. Generally speaking,
the cost of interest is higher than what a person can make investing, but this
isn’t always true. If you have a habit of investing incredibly wisely, you may
be able to pay down the principle with the windfalls, and just keep up with the
interest on a monthly basis.
If you’re a savvy investor. Generally speaking,
the cost of interest is higher than what a person can make investing, but this
isn’t always true. If you have a habit of investing incredibly wisely, you may
be able to pay down the principle with the windfalls, and just keep up with the
interest on a monthly basis.
3.
If you’re planning to move soon. Sometimes, it’s
difficult to get out from under a house in time to move into the new home you
want. By working with hard money lenders in Texas, you may be able to keep up with two payments, or use equity to
fund the down payment of your new home.
If you’re planning to move soon. Sometimes, it’s
difficult to get out from under a house in time to move into the new home you
want. By working with hard money lenders in Texas, you may be able to keep up with two payments, or use equity to
fund the down payment of your new home.
There are Many Benefits to Interest-Only Loans from Hard Money Lenders in
Texas
Although these three instances are the most-common, there
are many times when working with hard money lenders in Texas is the
best option. In the situations mentioned earlier, it was more an issue of lack
of income. However, when people flip houses, they often use this financing
method, too, simply because they’re actively building up the value of the home.
In other cases, easy approval even with poor credit is a helpful benefit. It’s
really a matter of knowing how to pay off the principle before the term ends,
or having a plan to transfer the balance elsewhere at the end. In the financial
world, this is called an “exit strategy,” and they’re especially important when
dealing with short-term loans.
are many times when working with hard money lenders in Texas is the
best option. In the situations mentioned earlier, it was more an issue of lack
of income. However, when people flip houses, they often use this financing
method, too, simply because they’re actively building up the value of the home.
In other cases, easy approval even with poor credit is a helpful benefit. It’s
really a matter of knowing how to pay off the principle before the term ends,
or having a plan to transfer the balance elsewhere at the end. In the financial
world, this is called an “exit strategy,” and they’re especially important when
dealing with short-term loans.
When in doubt, get advice from an expert on hard money lenders in Texas
Interest-only loans serve a valuable function, but they’re
not the best choice in for every circumstance. If you’re not sure if it’s the
right option, reach out to an expert with your questions. Regardless of your
financial situation, there’s a program that’s designed for people like you.
not the best choice in for every circumstance. If you’re not sure if it’s the
right option, reach out to an expert with your questions. Regardless of your
financial situation, there’s a program that’s designed for people like you.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
dennis@level4funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027
23335 N 18th Drive Suite 120
Phoenix AZ 85027
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 38 years. They have 2 beautiful daughters 4 amazing grandchildren. Dennis has been an Arizona resident for the past 32 years.