Frequently Asked Questions (FAQ)

Hard money loans are short-term loans secured by real estate that are funded privately instead of from a banking institution.  A hard money loan is not that different than a traditional mortgage.  It is a loan with repayment terms that is secured by real estate with a deed of trust.  It differs in the source of funds, the length of the terms, its cost, and its flexibility compared to a traditional loan.

Primary Source Lending is a local to Utah hard money lender.  We are located in Murray, Utah.  Our name comes from the fact that we are the primary source of the funds that facilitate our hard money loans, which is unique amongst almost all other hard money lenders.  Our loans are not brokered and do not use other investors’ monies.  Our loans are closed and serviced in-house.  You will be working with the same people from the beginning to the end of the loan.  We have a small agile loan committee that makes loan decisions fast.  Lastly, Primary Source Lending offers some of the best pricing and most competitive hard money rates.

Primary Source Lending has been in business since 2020, however the owner previously owned a similar mortgage company, Capital Assets Financial Services, since 1982.  We have been in the private money/hard money business for as long as anybody else in Utah.  We began Primary Source Lending to transition this family business to the next generation.

Primary Source Lending will lend on all types of real estate, including residential, commercial, land, entitled land, raw land, residential and commercial developments, and mid-construction properties.  We essentially lend on any type of real estate regardless of its status, however the type of property and its condition will influence the loan-to-value that we are willing to do for the property.

The maximum loan-to-value (LTV) is 75%, however our typical LTV is around 65%.

Primary Source Lending offers hard money loans as small as $100,000 up to around $5 million.  Our sweet spot is around $500,000 to $2 million.

Primary Source Lending offers commercial and consumer purpose hard money loans.

Interest rates vary depending on the unique attributes of the loan scenario and can begin as low as 8% interest for a low loan-to-value loan, however most of our hard money loans are around 10% interest.

Primary Source Lending makes short-term loans that are usually 12 months in length.  Our loans are designed to help in a temporary transitionary phase until you are able to obtain long-term financing.  Nevertheless, we can extend your loan beyond the initial 12 month period if you need additional time to complete your project or before you can qualify for a long-term refinance.  We try to be flexible with your needs.

Hard money is not as different from a traditional loan as you might think, including the fees associated with closing a hard money loan.  Typically, there will be an origination fee, underwriting fee, and title insurance fees, which are all common to any traditional loan.  The amount of fees are generally associated with the amount that is borrowed.

Primary Source Lending does not collect any fees upfront.

Primary Source Lending tries to be as transparent as possible regarding any potential fees on the loan.  During the underwriting process the fees can change as we analyze and assess the risk of the loan request, however we try to disclose all of the fees up front as we begin negotiations.  There will be a loan origination fee or “points” charged at closing and typically there is an underwriting fee, and applicable title fees.  Our goal is to have you go to closing without being surprised and for it to be exactly as described and negotiated, there should not be any hidden fees.

Yes, Primary Source Lending can fund all or a portion of the rehab costs on a construction project.  The amount of rehab costs that we are willing to fund depends on the type of project and the value of the collateral.  As an example, on a fix-an-flip loan we would require the borrower to provide 25% of the purchase price and 25% of the rehab costs and Primary Source Lending would fund up to 75% of the purchase price and rehab costs.

Primary Source Lending can approve a loan immediately on the phone within minutes if the loan fits within our standard guidelines.  If we can’t immediately approve the loan, then we will do our due diligence as quickly as possible with the goal to have the loan approved within 24 hours.  More complicated transactions may take longer than 24 hours in order to properly review and request items for due diligence.

Primary Source Lending can close a loan in at little as 24 hours.  Normally it will take 3-5 business days to close a loan to give time to gather documents, inspect the property, and gather a title report.  If all of the pieces to closing the loan are together from the outset the process can go very quickly.  Please provide as much documentation as possible from the beginning to improve the speed at which we can close your loan.

The amount that it costs to obtain a hard money loan depends on the circumstances of the loan.  See our rates and terms for more details.  Generally, you can expect to pay 2-3 points, which means 2-3 percent of the total loan amount as an origination fee.  In addition, you can expect to pay an underwriting fee between $800-1,000 and title fees that are associated with the loan amount.  Usually, the costs can be rolled into the loan so that you do not need to bring the fees to closing in cash.

Primary Source Lending does not charge prepayment penalties unlike many other hard money lenders.  We make sure that we make enough from the transaction at closing so that you can pay off the loan whenever you need to.  If you pay the loan off one day after consummation or after 3 months, there is no prepayment penalty.

See the How It Works page where we go into detail about our process.  The process is simple.  You contact us and we discuss your loan scenario, we will then determine if it is a loan that we can close, we will ask for documentation regarding the property, income, etc, we will get a title report, and then we close.

No, Primary Source Lending does not have a minimum FICO score for a hard money loan.  Loans approval is principally driven by the collateral.  Nevertheless, it can help with the loan decision if you have a good FICO.  It is not a requirement to have a good FICO, but it can help.

No, you do not need income or a particular ratio of income for a commercial hard money loan.  Although you do not need income to qualify, it is helpful to have good income in order to qualify.  Nevertheless, you will need the ability to make payments, but that doesn’t have to come from income but could come from assets that you already have.  For a consumer hard money loan, you will need some type of income to qualify for a loan.

Primary Source Lending uses its on private funds to fund its loans.  We do not broker our hard money loans, this is what makes us different and easier to work with.  It is literally where we get our name from.

The owners of Primary Source Lending have been making hard money loans for over 45 years.  The funds come from a lifetime of reinvesting the earnings of the business.

Primary Source Lending does not always require an appraisal.  Unlike a traditional loan you generally will not need an appraisal in order to close a loan.  We may ask for documentation to determine the value of the property.

Primary Source Lending does not offer 100% financing on our hard money loans.  The only case when this would be possible is if you were purchasing a property at a legitimate and significantly discounted price.  We do require the borrower to have an investment into the property, we require the borrower to have “skin in the game”.

We understand that things do not always go as planned and difficult times can lead to a default, in those instances it is critical that you communicate with us regarding your plans to resolve the default.  Primary Source Lending can be patient if you are able to demonstrate the steps you are taking to resolve the default.  Please do not stick your head in the sand.  If no steps are taken to resolve the default, Primary Source Lending always reserves its rights to collect its investment per the loan agreements.

Yes, as long as the loan is in good standing at the time of maturity, we will offer to extend the loan.  We understand that our loans are short term bridge loans and sometimes additional time is needed to pay the loan off.  Sometimes that initial loan period is not quite long enough and our loan extensions can give you the extra time needed.  We will reach out to you a month before the loan comes due to arrange for an extension, if needed.  Typically, there is a charge to extend the loan.