Discover Top Hard Money Lenders in Phoenix
Are you looking to kickstart your real estate investment in Phoenix with a hard money loan? Whether your goal is to flip a bungalow in the Roosevelt Historic District or purchase a rental property in Arcadia, hard money lenders in Phoenix provide the quick funding and flexible terms you need. These loans serve as an alternative to traditional financing — especially useful for projects requiring fast turnaround times or for those with less-than-perfect credit.
For homeowners needing to bridge the gap between purchasing a new home and selling their current one, this article provides valuable alternatives to leverage your home’s equity. Ahead, we’ll cover the basics of hard money lending in Phoenix, helping you decide if this financial strategy fits your investment or home-buying needs.
Editor’s note: This post is for educational purposes and is not intended to be construed as financial advice. HomeLight always encourages you to consult your own advisor.
What is a hard money lender?
A hard money lender is a private individual or company offering short-term loans secured by real estate. Unlike traditional lenders, who emphasize the borrower’s credit history and income, hard money lenders in Phoenix focus on the value of the property being used as collateral. Their clients often include house flippers and those buying rental properties, seeking quick access to funds with flexible terms.
Hard money lenders use the after-repair value (ARV), which is the estimated value of a property after renovations, to determine loan amounts. Typically, they offer a percentage of the ARV to ensure a secure and profitable investment. These loans usually have higher interest rates, ranging from 8% to 15%, and shorter repayment periods, often between 6 to 24 months. Additional costs may include origination fees, closing costs, and points paid upfront. If a borrower fails to repay the loan, the lender can seize the property to recover their investment.
How does a hard money loan work?
Hard money loans can offer the speed and flexibility needed to act on promising investment opportunities in Phoenix. Here’s a breakdown of how these loans work:
