Phoenix Arizona Hard Money Lender
If you know anything at all about hard money loans, you know that their interest rates are high. This may have turned you off to them in the past, but don’t let it deter you from pursuing one if the time is right for you. However, you need to keep in mind that getting a loan from hard money lenders in Arizona is entirely different than getting a loan from a conventional lending institution. You simply will not see those low interest rates you are hoping for, and we are going to do a bit more exploring as to why.
Hard money lenders in Arizona do want to lend to you, but you have to keep in mind that they are taking a significant risk in doing so because they do not base their decision on your credit or ability to pay. You can have embarrassingly terrible credit and still end up with a hard money loan. However, you will never get a hard money loan with a 3% interest rate. That is said without hesitation. Hard money loans are mainly short term and contain higher interest rates. The typical loan is anywhere from three to nine months—never the 30 year traditional mortgage.
The entire loan process can be an exhausting and frustrating one. However, if you see it through until the end, the results are usually very rewarding. Don’t let the higher interest rates deter you from pursuing a loan, but do keep in mind that you don’t pay all that much in interest because the length of the loan is so incredibly short. While I am not suggesting that a hard money loan is any better or worse than a traditional loan, you will not be spending tens of thousands of dollars on interest with hard money. Comparing the two types of loans is like comparing apples and oranges—just plain different.
For the most part, hard money lenders in Arizona will likely not be offering you single digit interest rates. That can be a harsh reality to face, but it’s good to know. Hard money lenders in Arizona tend to lower the interest rates for experienced investors, so if you’re new to the game, you may just want to hang in there for a while and feel it out.