Category Archives: mortgage brokers

Top Situations where a hard money loan is best

A hard money loan is any loan secured by a “hard” asset (i.e., An Asset-based loan). This type of loan can be your best option especially if you need financing to construct a new facility, to renovate a distressed property or if you need to make a purchase quickly.

Asset-based loans are typically short-term loans and are more expensive than traditional financing. Because of this higher expense, it is easy to ask, who would want this type of funding in the first place?

An asset-based loan is especially useful for real-estate investors who are speculating on a quick turn around when it comes to their project. Traditional lenders avoid relying on this kind of speculation.An obvious example is a fix-and-flip project, banks avoid financing these projects because there is no guarantee of a profit and the borrower could default in the end. Traditional banks are also wary of construction loans because they have to rely on the borrowers assumptions and success isn’t guaranteed.

A hard money loan can be the help you need if you need to fund a renovation or construction project

There are other reasons to consider asset-based lenders for renovation or construction projects. Typically a bank raises funds for a mortgage by reselling it to a government agency like Fannie Mae or Freddie Mac. Banks won’t be able to resell any mortgage on a distressed property that falls short of FHA guidelines.Therefore a typical bank will likely deny your application if you are trying to renovate a distressed property. Asset-based lenders raise their funds from private investors and have money on hand, allowing them to see past the poor condition of any property you intend to rehabilitate.

The situation can become complicated if you finance your construction loan with an ordinary lender. Banks disperse construction loans according to a specific timetable and specific benchmarks. The lender could withhold funding if your projecting doesn’t go according to plan. This scenario could be a disaster and could leave you unable to pay your contractors or to continue your project. The regulations that stifle traditional banks don’t hamstring asset-based lenders so you can get increased flexibility when it comes the terms of a construction loan.

However, asset-based lenders outshine traditional banks when it comes to time-sensitive purchases.

When it comes to time-sensitive purchases, a hard money loan can be a win-win solution

A typical bank loan usually closes within 120 days, and the best investment properties don’t stay on the market for long. Even the most qualified borrower won’t see their application go through any faster because banks have to comply with their own guidelines and with government regulations.

Asset-based loans can close within a matter of days allowing you to complete a time-sensitive purchase. An asset-based loan gives you the flexibility to then refinance to a long-term mortgage, or to sell the property for a profit.

In short asset-based lenders are ideal for borrowers who know the potential of their project, who need flexibility or who need cash quickly to make the most of a potential investment.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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Why small town businesses are finding it hard to get commercial loans

Lenders are withdrawing from less populated areas, and small businesses in rural areas are facing difficulty finding sources of commercial loans.

Local banks have been consistently closing in rural areas. The in-person service, which was once so crucial for small business financing, is quickly becoming a thing of the past. Banks are relocating to more populated areas, and larger banks continue to consolidate smaller community banks. These larger banks use algorithms, rather than personal relationships to evaluate a borrowers creditworthiness.

This trend is making it harder for many rural borrowers to qualify for business loans.The value of small business lending in rural areas is now half of its 2004 peak. Much of this decline is a result of the recession, but the amount of small business lending in urban areas only declined by a quarter over this same period. The numbers demonstrate that business owners in more populated areas are not facing the same difficulties as their rural counterparts.

The decline is having a drastic impact on business activity in less populated areas. Research by Colorado State University economist Stephan Weiler demonstrates a link between the reduction in small business loans and new business formation in rural areas two to three years later. His research did not reveal a similar pattern in urban areas.

Community banks have been leaving rural areas for decades, making commercial loans harder to find

There has been a measurable decline over the past 20 years in the number of smaller community banks in rural areas. These community banks were once the sole source of credit for many small businesses in these areas. 625 of Americas 1,980 rural counties have no locally owned community bank. 35 rural counties in America have no bank at all, and 115 have only one branch.

Lenders cite specific difficulties in rural areas.”It’s very hard to find highly competent commercial loan officers who want to live in these small towns and can produce an adequate amount of production,” said Jerry Rexroad CEO of Carolina Financial Corp.

Rural businesses also lack the detailed information which is used by many larger banks to assess the creditworthiness of borrowers. However, economic difficulties in rural areas make it harder for banks to do business.

Economic difficulties are making commercial loans harder to find in many areas

Rural areas face unique economic challenges. Employment growth suffers due to weak school systems. Local businesses suffer due to competition with big-box stores and few small business owners have seen their credit situation improve since the recession. Business lending in rural areas has not picked up since the recovery began. Although new small dollar loans have been on the rise, rural areas have only seen a modest increase.. Only 10 percent of new small business loans, roughly 22 billion, have been issued in rural areas since the recovery began.

It remains unclear whether the banks themselves or the economy in these areas are to blame these hardships. Nonetheless small town businesses will face difficulty securing financing for the foreseeable future.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Stated Income Mortgage in Arizona

A said revenue mortgage could be a useful instrument in
qualifying for a mortgage in case you are self-employed or have revenue that’s
troublesome to confirm. Study what a stated income mortgage is and see if one is an efficient match in your house loan wants.
In a standard mortgage qualification course of, the
borrower is requested to supply quite a lot of documentation. Key amongst these
paperwork are revenue verification paperwork. These embody W-2s, tax returns
for 2 years, pay stubs, and financial institution statements. Any further deposits right into a
checking account that can’t be verified by paystubs should even be accounted for.
Principally the monetary property of the borrower are gone over with a wonderful tooth
comb. This method works effectively for individuals who maintain conventional jobs with secure revenue.
Nonetheless, for debtors who’re self-employed, buyers, or have a distinct
non-traditional revenue scenario, revenue verification will be nearly unattainable.
For debtors who’re unable to furnish proof of revenue,
earn money in a non-traditional manner, or who might have a better than permissible
debt to revenue ratio, a Arizona stated income mortgage could be a resolution. A said
revenue mortgage
is a house loan the place the lender doesn’t confirm the
borrower’s revenue by way of W-2’s or tax returns. The borrower is requested to state
their revenue after which taken at their phrase.
Stated revenue
mortgage
s have been given a little bit of a nasty repute as a result of they’re simple
to make use of to commit fraud. One lower than flattering nickname for the loans is
“liar’s loans.” This nickname took place as a result of a examine of IRS tax data
discovered that in practically 60% of all said
revenue mortgage
s the borrower truly made lower than he/she declared as
revenue to acquire the loan. Some politicians try to restrict entry to
said revenue loans primarily based on the assertion that they might be used for
fraudulent functions.

When Does a Stated Income Mortgage Make Sense?

 

Regardless of its lower than flattering nickname and considerably
checkered previous, there are specific conditions when a said revenue mortgage is the most effective house loan choice. For a lot of
debtors one of these house loan is the one loan that may give them the
capital they should purchase the house they will afford. There are a number of conditions
the place a said revenue mortgage makes
sense.
The primary case in which a said revenue mortgage is a great selection is self-employment. This
is definitely the revenue scenario that the mortgage sort was designed for. For
many small enterprise homeowners, unbiased contractors, consultants, and different
self-employed enterprise folks, it may be troublesome to furnish proof of revenue
to the financial institution’s satisfaction. Income sources could also be thought of unstable or there
might merely not be a standard W-2 or pay stub that may be supplied. A said revenue mortgage permits the
enterprise proprietor to state his/her revenue and qualify for a mortgage primarily based on that
assertion.
One other case in which a said
revenue mortgage is an efficient choice, is for somebody who makes his or her
dwelling from investments. Take an actual property investor who owns a number of
properties all with loans. Even when this investor makes $100,000 a 12 months in
disposable revenue and has the mortgage on every property lined by lease,
his/her debt to revenue ratio is likely to be too excessive on paper to be given an
further house loan. A said revenue
mortgage accounts for the precise disposable revenue this particular person has to
spend every month, quite than simply what the monetary scenario seems like on
paper.
A 3rd scenario that may profit from a Arizona stated income mortgage could be in the
case of a freelancer or guide. People who find themselves employed in these fields
have a tendency to work for multiple firm. Their work can be usually
seasonal or might range from month to month. Throughout the mortgage qualification
course of, banks take a look at 2 months of pay stubs. If it’s a sluggish month, the quantity
of pay might not mirror the precise quantity that borrower earned and subsequently
he/she might not qualify for a excessive sufficient quantity, if in any respect. As well as, banks
require borrower works for a corporation for a 12 months or extra earlier than that revenue
supply is taken into account legitimate. A freelancer or guide usually works for a lot of
totally different corporations however just one or two on a everlasting foundation. Due to this fact the
precise revenue of the borrower might be $200,000 however solely $50,000 is counted as
revenue by the financial institution. A said revenue
mortgage
permits the borrower to make use of their precise revenue quantity to qualify
for a mortgage.
Most conventional banks don’t provide Arizona said revenue mortgages as they’re thought of greater threat loans.
Brokerage corporations and smaller banks usually have packages that may work with
debtors who want a said revenue
mortgage.

Dennis Dahlberg

Dealer/RI/CEO/MLO

Stage 4 Funding LLC
Arizona Tel:  (623) 582-4444 

Arizona Tel:     (512) 516-1177 

www.SETABAY.COM


NMLS 1057378 | AZMB 0923961 | MLO 1057378

23335 N 18th Drive Suite 120

Phoenix AZ 85027


 
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The Difference Between a Mortgage Banker and a Mortgage Broker

The Difference between a Mortgage Banker and a Mortgage Broker

One of many questions I’m most steadily requested is the place do I get a mortgage?  Effectively, there are two major channels that a client can get hold of a mortgage loan – mortgage banks and mortgage brokers.  Every of those teams have their very own distinct benefits and disadvantages.

Mortgage Banks: 

Typically, when individuals within the trade confer with mortgage banks, they’re typically speaking about giant retail banks similar to Financial institution of America, Wells Fargo, Washington Mutual, and so on.  What makes these firms mortgage banks is that they lend their very own money for mortgage loans.  In different phrases, whenever you get a loan at Financial institution of America, they’re truly writing the examine on the closing.

Mortgage Brokers: 

Mortgage brokersare middlemen who put dwelling consumers and mortgage banks collectively.  In different phrases, mortgage brokers don’t truly lend their very own money, however coordinate acquiring funds for you among the many many various mortgage banks.  Most mortgage brokers are small Mother & Pop enterprise that’s often not identified exterior of their native markets.  Nevertheless, there was a lot of consolidation within the trade and there are some giant brokerages which might be gaining in model recognition.
Personally, I favor mortgage brokers as a result of on common they are usually extra aggressive.  Mortgage brokers wouldn’t have an allegiance to at least one explicit financial institution and have the flexibility to seek out the very best offers for his or her purchasers.  When coping with a mortgage financial institution, all you might have entry to is that specific financial institution’s mortgage merchandise and charges, which can or is probably not aggressive on your scenario.  Moreover, in the event you want a area of interest loan product or have credit score points, you might be positively higher off with a broker.  I additionally imagine that the very best loan officers are inclined to work for brokerages.  Many banks use low paid name middle staff and telemarketers to work as loan officers.  Additionally, many loan officers work at banks early of their careers to get coaching and swap to brokerages the place they’ll earn extra money as soon as they’ve constructed a sustainable shopper base.
Many individuals falsely imagine that they’ll save money by going to mortgage banks immediately as an alternative of via a Arizona Mortgage Broker. What they fail to comprehend is that mortgage brokers get hold of WHOLESALE rates of interest from mortgage banks.  The charges that a broker will get from Wells Fargo or some other retail financial institution are considerably totally different than the charges that will be provided in the event you went to that financial institution immediately.  The cause is that it’s cheaper for a mortgage financial institution to supply their merchandise to brokers at a low cost and enable the brokers so as to add of their revenue accordingly quite than to attempt to rent, prepare, and handle their very own gross sales drive.  Merely put, mortgage brokers are like an outsourced gross sales drive for mortgage banks.  The normal market agrees with my evaluation as about 60% or so of mortgage loans are originated via brokers.
Mortgage banks do have their strengths.  First, many individuals favor to take care of recognizable model names.  Second, as a result of they’re making the lending choice, they are often extra environment friendly in some circumstances.  Want a loan closed in a week?  You might need a drawback getting it accomplished via a conventional mortgage broker.
The draw back to mortgage brokers is that there tends to be a “used automobile salesman” element to the enterprise.  A couple of unhealthy app
les spoil it for the true professionals.  With little or no regulation and ridiculously low obstacles to entry, mortgage brokerages may also entice some shady characters.  As a end result, it will be important that buyers make sure that they’re
coping with a respected mortgage brokerage and loan officer.  Once more, it isn’t concerning the rate of interest quote, however the individual you might be coping with.
Regardless in the event you select a mortgage financial institution or a mortgage broker to deal with your deal, it will be important to examine references, charges, and charges to make sure you are receiving a aggressive supply.



Massive Daddy Dennis Exhausting Cash Lender
Degree 4 Funding LLC
23335 N 18th Drive Suite 120
Phoenix AZ 85027

623-582-4444


The Difference Between a Mortgage Banker and a Mortgage Broker

The Difference between a Mortgage Banker and a Mortgage Broker

One of many questions I’m most ceaselessly requested is the place do I get a mortgage?  Properly, there are two main channels that a client can acquire a mortgage Mortgage – mortgage banks and mortgage brokers.  Every of those teams have their very own distinct benefits and disadvantages.

Mortgage Banks: 

Usually, when folks within the business consult with mortgage banks, they’re typically speaking about giant retail banks comparable to Financial institution of America, Wells Fargo, Washington Mutual, and so forth.  What makes these firms mortgage banks is that they lend their very own money for mortgage Mortgages.  In different phrases, while you get a Mortgage at Financial institution of America, they’re really writing the verify on the closing.


Mortgage Brokers: 

Mortgage brokersare middlemen who put house patrons and mortgage banks collectively.  In different phrases, mortgage brokers don’t really lend their very own money, however coordinate acquiring funds for you among the many many various mortgage banks.  Most mortgage brokers are small Mother & Pop enterprise that’s normally not recognized outdoors of their native markets.  Nevertheless, there was a lot of consolidation within the business and there are some giant brokerages which might be gaining in model recognition.

Personally, I favor mortgage brokers as a result of on common they are usually extra aggressive.  Mortgage brokers would not have an allegiance to at least one specific financial institution and have the power to search out one of the best offers for his or her shoppers.  When coping with a mortgage financial institution, all you’ve gotten entry to is that specific financial institution’s mortgage merchandise and charges, which can or will not be aggressive on your scenario.  Moreover, in the event you want a area of interest Mortgage product or have credit score points, you might be positively higher off with a broker.  I additionally consider that one of the best Mortgage officers are likely to work for brokerages.  Many banks use low paid name heart employees and telemarketers to work as Mortgage officers.  Additionally, many Mortgage officers work at banks early of their careers to get coaching and swap to brokerages the place they will earn extra money as soon as they’ve constructed a sustainable shopper base.

Many individuals falsely consider that they will save money by going to mortgage banks instantly as an alternative of via a Arizona Mortgage Broker. What they fail to understand is that mortgage brokers acquire WHOLESALE rates of interest from mortgage banks.  The charges that a broker will get from Wells Fargo or another retail financial institution are considerably completely different than the charges that may be supplied in the event you went to that financial institution instantly.  The motive is that it’s cheaper for a mortgage financial institution to supply their merchandise to brokers at a low cost and enable the brokers so as to add of their revenue accordingly quite than to attempt to rent, practice, and handle their very own gross sales pressure.  Merely put, mortgage brokers are like an outsourced gross sales pressure for mortgage banks.  The common market agrees with my evaluation as about 60% or so of mortgage Mortgages are originated via brokers.

Mortgage banks do have their strengths.  First, many individuals favor to take care of recognizable model names.  Second, as a result of they’re making the lending resolution, they are often extra environment friendly in some instances.  Want a Mortgage closed in a week?  You might need a drawback getting it achieved via a conventional mortgage broker.

The draw back to mortgage brokers is that there tends to be a “used automobile salesman” element to the enterprise.  Just a few dangerous apples spoil it for the true professionals.  With little or no regulation and ridiculously low limitations to entry, mortgage brokerages may also entice some shady characters.  As a consequence, it is vital that buyers ensure they’re coping with a respected mortgage brokerage and Mortgage officer.  Once more, it isn’t concerning the rate of interest quote, however the individual you might be coping with.

Regardless in the event you select a mortgage financial institution or a mortgage broker to deal with your deal, it is vital to verify references, charges, and charges to make sure you are receiving a aggressive supply.




Large Daddy Dennis Exhausting Cash Lender

Degree 4 Funding LLC

23335 N 18th Drive Suite 120

Phoenix AZ 85027

623-582-4444