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Can You Use Owner Occupied Arizona Hard Money Loans on Your Own Home?
When it comes to , you’re expected to use the space as your primary dwelling. The catch-22 is that there are few lenders who will provide funds under these circumstances, so you may have to explore other options.
There are financial products for virtually every circumstance, which is a good thing because that means you can usually find some type of financing regardless of your situation. However, identifying which product is right isn’t always easy, and if you’re a home owner exploring your financing options, getting to the core of how work is essential.
This type of financing is provided by private lenders; individuals and sometimes institutions rather than big banks or credit unions. In most cases, it’s packaged as a commercial or business solution. In other words, the property cannot be your primary residence. Lots of people who work in real estate investing, such as home flippers or landlords use it, but in this case, it’s a “non-owner occupied” solution.
When you, as the homeowner, plans to live in house more than half the time, you must seek out the “owner occupied” variety. Few lenders provide this option because government regulations change the way the financing is handled. Furthermore, the market already has many options for this. There are traditional mortgages and alternative financing options to suit this type of need, and they’re generally more cost-effective.
Why Do People Look to Private Lenders to Finance Their Personal Homes?
The reality is, banks are totally geared toward homeownership and there are even federal programs designed to get people into houses they can share with their families. For banks, there’s little risk involved in extending this kind of financing, especially when the borrower has good credit and reliable income. Yet, there’s obviously a gap here. Sometimes, people don’t qualify for a traditional mortgage. It’s situations like these where people start looking toward , but opportunities to secure them are few and far between.
Other times, all a person’s money is tied up in equity in their current home. If you want to move, but don’t have the funds for your next down payment and moving expenses, it makes sense to tap into your equity before your current home is sold. Moreover, if you already have one home as a primary residence, you aren’t going to qualify for programs that require the new home to be your primary residence. That makes banks wary. They become concerned that you’ll default on your non-primary residence, and so your funding options evaporate. It’s situations like these that short-term financing from a private lender can be a huge help. That said, these solutions are technically not “owner occupied,” as you don’t actually plan to live in the residence. That’s actually a good thing because it means you’ve got more options in the private lending space than you otherwise might have.
Seek advice from a broker in the private lending space to find the right solution for your needs.Whether you’re , a loan for a property that will not be your primary residence, or funding to help you bridge a gap between the sale of an old home and the purchase of a new one, there are options. The best way to uncover which financial product is right for your situation and needs is to chat with a seasoned broker who knows the space well and can help you find the best one.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
[email protected]
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.
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