Looking to make your first rental property purchase? It can be daunting, even if you’ve bought a home in the past. After all, this is a business venture, not a home purchase. So, you’ll need to know the basics of getting financing before you take your first steps. Let’s look at some of the main differences between the two:
● You’ll have to put more money down for a rental property. Because traditional lenders consider Arizona Rental Property Loans a bigger risk than a conventional mortgage, they’ll ask you to put more money down. We’re talking about a minimum of 20 percent, but it could be as much as 40 percent depending on a range of factors.
● You won’t need mortgage insurance. With a typical home purchase, you must buy insurance on the mortgage. With a Arizona Rental Property Loans, there’s no need to do that.
● Interest rates are higher for rental property purchases. While many traditional lenders will claim that their loans on investment properties are just 0.25 percent to 0.5 percent more than their mortgages. Not in the real world. In the real world, you’ll end up one to three percentage points higher.
● You’ll need a minimum of three months payments in your account to apply for an investment property loan.
One alternative to a conventional bank loan is a hard money Arizona Rental Property Loans. With a Hard Money Loan in Arizona, the risk is tied to the collateral, so approval is based less on credit scores, incomes, and past history, and more on the property’s value or potential value. These types of loans can work as bridge loans to get you started on the purchase and repairs of the property until you secure longer term financing.
If you’re looking to invest in a rental property in Arizona and you’re considering a hard money Arizona Rental Property Loan, Level4Funding may be able to help. We offer a lightning-fast approval process (24 hours), loan-to-value (LTV) of up to 90 percent, no prepayment penalties, and rates starting at only 7.99 percent. Call us today to talk about partnering.
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.