Avatar's Blog
» What Are Up Front Fees?
When seeking hard money loans, you are likely to hear a lot about 'up front' fees. Up front fees are fees charged by some lenders and many brokers to look at a loan package. Avatar believes upfront fees to review a loan package is a little like charging you to make a sales call.
Sorting through a loan package, helping you prepare it, etc. takes a lot of time and effort on Avatar's part. But we believe in good service to our brokers and borrowers. We will not charge for the opportunity to review a loan package. Once we have reviewed the loan package and made a determination on whether Avatar can fund a loan, we will issue a Term Sheet and Letter of Intent. Only then do we ask our borrowers to make a down payment toward the third party costs of due diligence. These funds are credited at closing against those costs. We do not keep the funds. All points, fees, etc. are wrapped into the loan to reduce out of pocket expenses for our borrowers.
