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» All About Due Diligence Fees

Posted on 3/10/2005

Many commercial borrowers are surprised to find that they must pay for the costs of due diligence before closing the loan. Residential lenders pay for those costs and many are unaccustomed to the commercial lending practices. Residential mortgage lending is a highly regulated field of finance in the US. Comnmercial lenders have more leeway to charge the fees they wish when they wish to.

Some hard money lenders charge up front fees to review a loan package. This write counsels against paying such fees. Nearly all hard money lenders do ask the borrower to make a down payment toward the costs of due diligence when they issue a Letter of Intent and/or Term Sheet. These costs include:

  • appraisal(s)
  • inspection(s)
  • site visit by the lender
  • financial document review
  • document preparation
  • escrow
  • misc

 

Posted in Miscellaneous