Hard money Lending For fix and flip

[Jeff Reed]

Is an origination fee paid out of the loan or upfront?

[Mike Klarman]

Never pay an origination fee prior to closing - THAT'S A CLEAR CUT SIGN THAT YOU'RE BEING SCAMMED.

There's one transaction in a real estate deal. Borrower gets their money, bank gets their fees, sometimes insurance companies submit invoices, title companies, brokers. The HUD is created with an itemized list of charges and who owes what and a collection of all invoices. Then there is one transaction and all money exchanges hands at one time.

You do pay for things like an appraisal, sometimes a credit check, you'll pay for a Collateral Desktop Analysis sometimes as well.  That's an in-house bank review of the appraisal to make sure it's within range.  It's only 90 bucks.

But do not ever pay loan associated fees or points prior to closing.  Any lender that asks for that does not intend to wire you the funds and you'll probably never hear from them again.