Avatar's Blog
» When to Pay Due Diligence Expenses
Posted on 10/10/2004
If a lender expresses interest in funding your loan, you should receive a term sheet via fax or mail, stating the terms (time frame of the loan) and the costs (rate, points, due diligence costs, fees, etc.) of the loan.
A term sheet provides you reasonable expectation that the lending company is ready to fund your loan, assuming that no "bumps or warts" show up during inspection of the property, appraisal reports, financial info, etc.
At this point, you will be asked to pay about $5,000 toward the costs of due diligence expenses, which can include travel, property inspection, reports, appraisals and more. This amount should be credited toward those costs at closing.
Due diligence expenses are not "upfront" fees. They are a purchase or services. Whether or not your loan is funded, this money is well spent to obtain critical info about your property and project.
Posted in Miscellaneous
A term sheet provides you reasonable expectation that the lending company is ready to fund your loan, assuming that no "bumps or warts" show up during inspection of the property, appraisal reports, financial info, etc.
At this point, you will be asked to pay about $5,000 toward the costs of due diligence expenses, which can include travel, property inspection, reports, appraisals and more. This amount should be credited toward those costs at closing.
Due diligence expenses are not "upfront" fees. They are a purchase or services. Whether or not your loan is funded, this money is well spent to obtain critical info about your property and project.
Blog Navigation
