hard money loans

If you are in the process or just considering getting into the rehab and re-sale of the real estate business you need to understand that in this type of business –  things will go one of two ways:  One of those ways would be to make a profit, and the other way would be to lose your investment. Investing in real estate in order to re-sale it for a profit has a lot of risks involved, however, the rewards will more than make-up for the risk  in the long run, when the process is done in the correct matter. The first risk is one that may not have ever occurred to you, and that is with the lender that is helping you to get the Hard Money Loan.

Never take for granted that a lender cares whether or not you gain a profit, and certainly don’t rely on the lender to give you all of the information regarding your loan, in fact, what information they do tell you may not be the all of the information you need to know, or it may not even be true. These lenders deal with dozens of people every day and to be honest about it; they couldn’t care less if you gain or lose on the deal, so long as they make their money back, plus the large interest. If you want to turn things around and put yourself in control of the situation be sure to as the lenders all of the following questions up front.

Ask the lender these 13 questions:

(1). Is there a minimum credit score to get the Hard Money Loan?

Our answer to this is…‘No’, our policy requires no minimum credit score in order to qualify for any direct loan we offer. In addition to that, we do have a minimum requirement for your credit score when dealing with partner loans, which is a low of only 575.

Their answer to this is…‘Yes’,in general, all other lenders will have a credit score minimum requirement for (any and all of) the loans they offer. The minimum credit score being at or above 700.

(2). Is there a minimum down payment?

Our answer to this is… ‘No’, There is no minimum down payment to make with all of our direct loans. And through partner loans the minimum down payment is a low down payment of only $7,000 to $10,000.

Their answer to this is…‘Yes’, other lenders ask a minimum down payment of 20-25% based on a loan of $100,000 (this is extremely high).

(3). Is there any previous experience in residential rehab and re-sale needed?

Our answer to this is…‘No’,Experience is not required for any of our loans.

Their answer to this is…‘Yes’,other lenders generally will require the experience of two previous Fix & Flips.

(4). Is there any type of resources that you provide to help me in succeeding?

Our answer to this is…‘No’, Our business wants to see you succeed the first time around with us, and that is why we will be providing you with  everything needed to see that you are profitable your first time out.

Their answer to this is…‘Yes’,other lenders aren’t concerned whether you succeed or not, in fact, some would preferred to foreclose on you.

(5). Are you the type that will double check contractors bids to make sure they are correct?

Our answer to this is…‘Yes’, for us to be absolutely certain that you are getting the best prices to increase your profits.

Their answer to this is…‘No’, other lenders couldn’t care less how much repairs are going to cost you, nor do they care if you make any profits.

(6).   Are you going to oversee any repair work to be done, and see to it that everything is finished right – ensuring the home is going to sell?

Our answer to this is…‘Yes’, we make sure of this for you because our goal is to help minimize  the term of your loan and also to help to increase your profits.

Their answer to this is…‘No’, other lenders prefer to drag the loan term out as long as possible, as they receive more interest that way.

(7). Will you be doing a detailed profit estimate to know whether I will actually make money off of the deal?

Our answer to this is…‘Yes’, we certainly will, we do this to be sure of what your getting into, and this is because we want your business again someday.

Their answer to this is…‘No’, other lenders take for granted that you know what you were getting into and leave it at that.                                                                                                                                 

(8). Will I be receiving an itemized list from you showing all my closing costs?

Our answer to this is…‘Yes’, All closing costs will be given in detail from the get go.

Their answer to this is…‘No’, other lenders try not to bring up the closing costs until its closing time.

(9). If there are any third party costs will I also get a detailed list of those?

Our answer to this is…‘Yes’, any third party costs will be given to you in detail stating what each specific cost is for, including the agent fees, title gees, transfer taxes, and utilities, as well as any other costs that sometimes get overlooked.

Their answer to this is…‘No’, other lenders tend to overlook this altogether, which leaves you with an expressive surprise later on.

(10). Are there any penalties for pr-payments?

Our answer to this is…‘No’, so when you rehab and re-sale a property in, let’s say three months – you only pay interest for those three months.

Their answer to this is…‘Yes’, other lenders are charging a flat rate on interest, for instance, they charge a flat rate of 6 – 12 months interest regardless of how early you pay the loan off.
(11). Is the loan based on the after repair value (ARV)?

Our answer to this is…‘Yes’, our loans cover up to 65% of the after repair value, that means that all of your costs, such as the purchase price, the interest on the 65%, and any repair costs, which means that if everything can be done for the 65% or under we can loan you 100% on the financing needed, and there would be no out of the pocket expense for you.

Their answer to this is… ‘No’, other lenders usually will only loan out between 60 and 80% of the price to purchase before any repairs.

(12). How about my points, interest, and repair costs, do you fund those?

Our answer to this is… ‘Yes’, we work to help you to find great deals, and anytime you find it we will fund all of your expenses for you.

Their answer to this is… ‘No’, other lenders are not willing to do this as they are in it to make money when you don’t succeed.

(13).  Do I have to give you any money before the repairs are finished and the home is sold?

Our answer to this is…‘No’, we want to see you make profits and that is what we let you concentrate on, so no, you do not pay us anything before hand.

Their answer to this is… ‘Yes’, other lenders want you to make payments on the interest while you’re still repairing the home to sell.

Our mission is to always have your wishes and interests in mind, and our goal is to keep a satisfied customer by ‘opening the door to their financial freedom’, and so that our customers will return to us the next time they need a loan. Furthermore, we do not anticipate gain from any of customers. Our gain will come from treating our customers fairly, and in due time.

When we hold our heads up its not to look into the clouds, but because we can feel proud, and good about the way we do business. By helping you succeed the first time around, we are hoping that you will return again, and again, and even tell of your great experience to all your friends and family so they’ll also come to us.

Give us a call today if you are interested in hard money loans for fix and flip, finishing construction,refinancing your mortgage, buying land, or need loans for other investment opportunities but have bad or no credit. Give Brad Loans a call today at (602) 999-9499.

I’m sure you have seen interest rates rising recently, don’t wait till it’s too late. I know you worried about your credit but you can still get loans with low and acceptable interest rates. Here are some awesome tips on refinancing your home mortgage loan even if you have bad credit.

 

Should I refinance my mortgage?

Even though you might not qualify for the lowest mortgage rates, it could still be worth your time to refinance if you’re paying a really high rate. The rule of thumb is, reduce your rate by at least 1 full percentage point or it isn’t even worth your time. Although, a smaller decrease could still be worthwhile if you plan on staying in your home for a long period of time.

Also, it makes sense to refinance your mortgage if you require a balloon payment or have an Adjustable Rate Mortgage (ARM) that is going to reset at a higher rate. Although, right now, it is not likely that a regular ARM will reset. But if you have an option-ARM or interest-only, you might end of paying higher payments if you choose not to refinance.

 

Loan borrowers with credit scores below

Loan borrowers with credit scores lower than 600 or so will have a tough time refinancing. There may possibly be a few loan lenders that will approve someone with this type of credit score but they could have to pay a rate a lot higher than other home owners with better credit ratings.

If your poor credit rating is due to a serious mortgage delinquency (a missed payment more than 90 days late), you likely won’t be able to refinance. A loan modification may be a more realistic option. Contact your mortgage servicer (the company you send your mortgage payments to) to inquire about options.

Although, if your bad credit is due to less factors, such as a late payment on your car of high credit card debt and you are paying a high rate of interest on your mortgage, you might still be able to refinance but at higher rates. You probably won’t qualify for the lowest rates.

 

How to fix your credit score to get lower interest rates on refinancing

If you have poor credit or bad credit, the best way to quality for a mortgage loan is to improve your credit score. There are usually 2 major ways to do that:

• Improve your credit record
• Correcting Any errors that might be in your report

 

The fastest way to fix your credit score is to fix any errors in your credit report.

You are entitled by law to a free copy of your report every year from all three major credit reporting agencies:

• Experian
• Equifax
• Transunion

All three credit scores can be ordered through the official credit website http://www.myfico.com.

Once you have your reports, do a detailed check for errors in your payment history. If you find an error, contact the credit agency the produced it and inform them of it. Be prepared to prove the error by giving them copies of your payment statements.

To get better credit history, start paying your bills on time. Although, many people are stunned to find out that they can get better credit history simply by paying of high balances on credit cards.

If you have a balance of 25% or more on your credit cards, it’s going to hurt your score. If you have savings or can borrow money from others (not credit) to pay on your debts, you should do it. It will make a difference when you try to refinance.

About FICO scores

When checking your credit report, you should obtain your FICO credit score from at least one of the major credit reporting agencies. Keep in mind that you are entitled to a free copy of your score every year but you normally have to pay money to get your FICO score. You can get FICO scores from Equifax or Transunion for $20 dollars. Experian will not provide FICO scores.

Sometimes, you can get a free FICO credit score by contacting a credit report service, but since you usually pay for that, it’s not really a free FICO score after all. Credit reporting agencies include a credit score in your free report but it’s not the FICO score that Mortgage loan lenders use.

The great advantage of knowing your real FICO score is that you know where you stand with your credit. Knowing where you stand will help give you an idea of where you stand and your chances of refinancing. It will also be a gateway into finding out what rates you might have to pay of how much your score needs to improve to get a better credit rating.

 

Get interest rates from multiple loan lenders

The best way to refinance your mortgage with bad credit is to shop around. There are some loan lenders and brokers that cater to people with weak, poor or bad credit. Plus, it doesn’t hurt to look around.

Find out what your credit score is (read below) and contact at least 5-10 lenders and find out what type of terms and interest rates they offer. Also, talk to mortgage brokers, they won’t loan you the money themselves but they work with a ton of different lenders and could get you in contact with the type of loan servicer you are looking for. It may be tough to find them because there ads and websites are very similar to loan lenders.

Brokers are great because they know which type of lenders work the best with borrowers that have bad credit. They usually will take a piece of the action themselves but the discounted terms always work out better for the borrower in the end.

Contrary to popular believe, it’s actually not that harmful to your credit to get hit by multiple credit inquiries. As long as its within a short period of time (1-2 months). Credit agencies know that anyone trying to get a loan is going to shop around and won’t harm your credit score as much as you might think. Just make sure you don’t sit around looking to long, after 2 months you could start getting penalized.

 

Looking for solutions to refinance your home with bad credit?

There are options that don’t require the best credit to qualify for.

Options 1: HARP 2

Harp 2 is one option to consider. Harp 2 is the renewed Federal Home Affordable Refinance Program.

No Loan-to-value restrictions for this refinance program but there are requirements:

• Your mortgage loan is owned by Freddie Mac or Fannie Mae
• Mortgage is delivered to either one by Jun 01, 2009
• You have never used the FHRP before
• No FHA loans

The main goal of Harp is give lower rate loans to homeowners that owe much more on the home than it’s worth.

Don’t know if Freddie Mac or Fannie Mae owns your mortgage? Here are some look up tools from Freddie and Fannie that make it easy to look up and find out.

Option 2: Refinancing FHA Loans & Loans Issued By The Government

If the Federal Housing Administration or (FHA) insures your loan, be sure to check out those refinancing options as well.

FHA programs are sometimes easier to refinance because they have less qualifying guidelines than most other mortgage programs.

One of the disadvantages to refinancing with FHA is that your mortgage insurance increases.

Even if you don’t have equity in your home, all is not lost. You can still get refinancing done to get around that problem. Most lenders want you to have equity but if you don’t, you can still use FHA loans and loans issued by agencies like the (HUD) Department of Housing and Urban Development.

Refinancing with a FHA loan requires only a tiny amount of equity to get a refinanced mortgage with a LTV limit of 97%. For example, if your property is worth $100,000, you can get a refinanced loan for up to $97,000 which is 97% of what your property is worth.

Stated by the Department of Housing, in order to refinance you must already be FHA insured and your mortgage be not be delinquent. So any borrower who fell behind on payments to an FHA insured mortgage cannot use this program.

Also, if you currently have a FHA loan, you might be able to do a FHA streamline refinance which is a mortgage product used for current FHA borrowers only.

For applicants that might not be the perfect buyers on paper, the FHA streamline program might be perfect for them. The FHA program doesn’t require an appraisal. So you can qualify for this loan if you have no equity in your home or your home in underwater. Also, this program is easy to qualify for because you don’t have to verify employment, credit or income.

Your home may not be underwater and some bank still won’t want to refinance your mortgage if you don’t have equity in your home.

Banks shy away from refinancing properties with little or no equity because loans are based on the market value of your home.

You can literally save hundreds of dollars a month and up to tens of thousands of dollars over the lifetime of the 30-year mortgage loan.

 

Option 3: You need equity in your Home

If you don’t have equity, you loan is seen as very risky and reduces their willingness to give you a refinanced mortgage.

Also, you can’t take cash out of a FHA mortgage that refinanced using the streamlined program resulting in lowering the borrowers interest and monthly principle.

Also, depending on how conservative to bank is, the more amount of equity they are going to want you to have before giving you a loan. Some loan servicers want you to have at least 25-30% equity in your home before they will consider refinancing it. Your loan to value ration needs to be at least 70%.

In monetary terms, a loan to value ratio of 75% means that the loan lender is willing to lend you $75,000 on a home worth $100,000.

Mid-level loan lenders will do mortgage loans for 80-90% loan to value ratio, meaning they would loan you 80-90 thousand dollars on a property worth $100,000.

Aggressive loan lenders will offer a 95% or higher loan-to-value ratio.

 

Don’t Expect the Lowest Interest Rates

I’m sure you have seen the advertisement online and TV commercials that state that home owners can get interest rates as low as 3-4% but the chances of getting a rate like that with bad credit is out the window. As of July 29, according to BankRate.com, the avg. 30 yr fixed-rate mortgage loan was 4.03%. The chances of getting interest rates below 4% have passed and gone.

Rates have been slowly rising in the recent week, somewhat due to the Federal Reserve not buying back bonds anymore something that had been keeping interest rates low for a long time.

Although, some people can still get these rates if they have perfect credit but a borrower with bad credit will not qualify for these awesome interest loans.

So if your credit score is bad, you can refinance but not at the lowest loan rates in the marketplace.

 

How much money will you have to pay?

Depending on how bad or poor your credit is, (What’s Considered Bad Credit) you may not be able to get the low interest rate that you had hoped for. A loan borrower with a credit score of 630 would expect to pay rates about 1.5% higher than a loan borrower with a perfect credit score based on the same loan, assuming the loan servicer will even approve someone with bad credit in the first place.

A better but still scarred credit score of around 670 or so may mean that you will only have to pay about 1/2% more than a loan borrower with a “perfect credit score” of 760 or higher. Keep in mind, that other variables, like the amount of equity you have in your home, will affect your loan interest rate as well.

 

Option 4: Make sure your loan application is pristine if you have bad credit

We have discovered that bad credit by itself won’t keep you from getting your home refinanced but if the rest of your loan application is all over the place, you might not be able to get it.

Try to cover up the credit situation by making the rest of your application as perfect as possible, especially if you are looking at a conventional mortgage loan.

Get all you paper work together (for example: your paystubs, tax statements for the last 2 years and w-2’s) Also, it looks really good on you if you have a long standing history at the company you work for. Let them know how long you have been at your current job and if you have a raise coming up or recently got one. That show the loan servicer that you have stability and that is exactly what they are looking for. Make sure you get documentation to prove the recent raise or future one if you can.

Lastly, get all your bank record and savings account statements together. Having a cash backer is a great way to look attractive to the loan lender.

In conclusion, if your application looks nicely put together and provide records that prove your stability, the likeliness of you getting your loan seems a little more feasible – even if you have poor, weak or bad credit.

 

Final Option: Refinance your mortgage with a hard money loan

Are you refinancing mortgage with bad credit or are you in need of a no credit check, hard money loan fix and flip, real estate, business loans, short sales or other endeavors with quick turnover? Look no further than Brad Loans, the most trustworthy hard money lender or private money lender in Arizona! When traditional banks and lenders have let you down, count on BradLoans to come through for you in your time of financial need. Call now to speak to a live associate (602) 999-9499. We are the most knowledgeable, fastest, and most reliable loan lenders in Phoenix, AZ. Hard Money Loan Definition & Explanation: A hard money loan is a specific type of asset-based loan financing in which a borrower receives funds secured by the value of real estate or a parcel. Hard Money lending is typically issued by companies or private investors.

The definition of hard money loan is: A short term loan or last resort loan to close a gap or bridge in your finances. Hard money loans are not based on credit but it backed by the overall value of the property. Kind of like one of the government issue loans but with lower loan-to-value ratios. Due to the property being used as the protection against default from the borrower, these type of loans usually have a low loan-to-value ratio also known as (LTV) typically lower than other conventional or traditional loans.

Brad Loans Explains “Hard Money Loans”

A hard money loan will also have higher interest rates than subprime loans or conventional or traditional loans. Traditional lenders won’t usually make hard money loans because there is too much risk involved, hard money lenders are usually private investors that see potential in this risky market. Hard Money loans are commonly used in quick fix and flip, short term financial needs or by loan borrowers with bad credit but have equity in the property they own using it as a last resort to avoid foreclosure.

Get Started Here: Fill out our Hard Money Loan Mortgage Refinancing Application