Because hard money is being funded by a private lender, there can be a huge number of variables when you are comparing loans as well as when you are comparing Arizona Hard Money Lenders themselves. So the only way to be certain that you are getting the best rate possible as well as the best terms to meet your lending needs is to create a short list of questions to ask each of the Arizona Hard Money Lenders that you are considering or interviewing.
The first question to pose to potential Arizona Hard Money Lenders is regarding the cost of using their money. In its most basic form, this is the interest rate that he or she charges as well as the points that are charged at closing. In most cases, each lender will have a very straightforward answer for a basic loan request but the number could increase if the lender feels that your project has an above average risk factor involved. This could include anything from your lack of experience or bad credit to a questionable location or condition of the property being purchased.
Most lenders will also have a list of upfront fees that they charge. These can include appraisal of the property as well as administrative fees for the processing of your application and the funding of the loan. But be concerned if the application fee is substantial and is not clearly called out as refundable if you do not secure the loan. You should also ask about any additional fees expected throughout the life of the loan. In short, you should always ask for a very detailed breakout of all of the fees and costs associated with the loan so that you can compare the cost of each loan.
When you are discussing fees with each lender, be certain to bring up penalties. Some lenders will not mention penalties for early repayment but they might offer up the fees for a late payment. Early repayment is something that can save you a great deal of interest if you have the opportunity to pay off the loan early. But the flip side to that is that the lender is losing a part of the money that he or she was expecting to earn from the loan. So many lenders will charge a large penalty to ensure that they get all of the interest that they were counting on.
Timing is critical in many real estate investment deals and it is important that you have the approval and funding time frame in writing. Ask for a maximum number of days that you would wait to learn of approval as well as the maximum timeframe for funding to ensure that you don’t lose a deal waiting on a slow lender. With all of this information in hand, you will be able to determine which lender offers the terms that best meet your needs and are doing so at an affordable rate.
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.