SourceOne specialiazes in low cost bridge loans for residential
and commercial properties.

As a private-money lender, SourceOne has the ability to process, fund and service loans
in-house, which means less work and frustration for our borrowers and brokers.

Borrow $50,000 to $2 million+

• Close and fund in as little as 24 hours – trustee’s sales handled
• Same day commitments when possible
• Interest-only payments
• Minimum documentation
• Flexible loan terms
• Residential acquisition and refinancing (non-owner occupied only)
• Land acquisition, development and refinancing – raw land to lots
• Commercial property acquisition and refinancing
• Priced from 13% and 2 points

SourceOne Financial has built its reputation by assisting borrowers and investors with fast, simple, honest mortgage solutions. When we commit, you can take it to the bank!

Apply for Loan Online

Why SourceOne Financial?

SourceOne’s “Soft” hard money provides borrowers the following loan advantages:

Minimal Loan Costs:

• No Loan Processing Fees
• No Prepayment Penalties in Most Cases
• No Underwriting Fees
• No Document Preparation Fees
• No Credit Report Fees

Speed & Convenience:

• Fast—Close in as Little as 24 Hours
• Minimum Documentation
• No Credit Reports
• No Income Verification

Flexible loan Terms:

• Interest-only Payments
• No Prepayment Penalties on Most Loans
• Maturity Up to Two (2) Years

4547 South 700 East, Suite 100 Salt Lake City | Utah 84107 | ph: 801-265-1040 | Fax: 801-261-4545 | jeremy@source1.com
© 2009 Hard Money Utah .net

Hard money loan, what is it?

A hard money loan is a specific type of asset-based loan financing through which a borrower receives funds secured by the value of a parcel of real estate. Hard money loans are typically issued at much higher interest rates than conventional commercial or residential property loans and are almost never issued by a commercial bank or other deposit institution. Hard money is similar to a bridge loan, which usually has similar criteria for lending as well as cost to the borrowers. The primary difference is that a bridge loan often refers to a commercial property or investment property that may be in transition and does not yet qualify for traditional financing, whereas hard money often refers to not only an asset-based loan with a high interest rate, but possibly a distressed financial situation, such as arrears on the existing mortgage, or where bankruptcy and foreclosure proceedings are occurring.

Many hard money mortgages are made by private investors, generally in their local areas. Usually the credit score of the borrower is not important, as the loan is secured by the value of the collateral property. Typically, the maximum loan to value ratio is 65–70%. That is, if the property is worth $100,000, the lender would advance $65,000–70,000 against it. This low LTV provides added security for the lender, in case the borrower does not pay and they have to foreclose on the property.

A hard money loan is a species of real estate loan collateralized against the quick-sale value of the property for which the loan is made. Most lenders fund in the first lien position, meaning that in the event of a default, they are the first creditor to receive remuneration. Occasionally, a lender will subordinate to another first lien position loan; this loan is known as a mezzanine loan or second lien.

Hard money lenders structure loans based on a percentage of the quick-sale value of the subject property. This is called the loan-to-value or LTV ratio and typically hovers between 60 and 70% of the market value of the property. For the purpose of determining an LTV, the word “value” is defined as “today’s purchase price.” This is the amount a lender could reasonably expect to realize from the sale of the property in the event that the loan defaults and the property must be sold in a one- to four-month timeframe. This value differs from a market value appraisal, which assumes an arms-length transaction in which neither buyer nor seller is acting under duress.

Below is an example of how a commercial real estate purchase might be structured by a hard money lender:

65% Hard money (Conforming loan)
20% Borrower equity (cash or additional collateralized real estate)
15% Seller carryback loan or other subordinated (mezzanine) loan

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