Hard Money - ARV Loan Question

[Daniel Ramirez]

Hey BP Community,

I'm getting quotes on an ARV loan for a fix/flip project from a Hard Money Lender. They are offering 90% of ARV at 12%, with 4.5 points. My question is, does the point charge get applied to the Borrowed Amount or to the ARV.

Example, I'm borrowing $100k, would the point charge be $4.5k. Or, if the ARV is 200k, will the point charge be $9k (4.5% of 200k)?

Thanks!