Don’t let lender fees catch you off guard.
Know exactly what fees will be due,
before underwriting takes place and at closing.
Some of the fees incurred are upfront fees which are due prior to the lender commencing underwriting. The total initial fees depend on the loan size, lender, type of guarantee and the project. These fees normally include out of pocket expenses that the lender will incur for legal, appraisal, underwriting, and due diligence for processing the loan request.
Fraud is rampant in the loan industry, as well evidenced by the “meltdown” in Commercial lending over the past several years. Iseetrust-Iseetrade also has its share of borrowers trying to get something for nothing or use our offers to defraud unsuspecting small borrowers.
Since you are here please do read the whole article and if you have a Megaproject needs funding to contact us, please do not use a middleman.
Whether it results from being an unsophisticated borrower or deliberate intent to defraud, there are many people wanting a lender to provide them with all the cash they are asking for, do no due diligence and believe that the borrower is totally honest and will make all the payments on time and pay the loan back when it is due.
“TANSTAAFL.” “There Ain’t No Such Thing As A Free Lunch.” In economic terms, this means everything has a cost, whether the cost is monetary, environmental, emotional, psychic, direct or indirect.
In private commercial lending, the individuals or entities doing the lending are private, that means they are not banks, commercial mortgage companies, or other bank-like institutions that are usually public companies and fall under a variety of federal lenders.
Private lenders are private. They can be privately held corporate pensions, privately held insurance companies, private equity funds, private individuals, or any variety of private trusts.
As such, they do not have loan officers. They do not solicit business directly from the general public. They rely on referrals and trusted relationships. They also do not have loan processors, underwriters, or other staff who help evaluate the merits of each loan request. They subcontract all these functions and pay for them out of pocket.
Whereas major banks may offer special deals for lending that are low fee loans, the commercial banks can and will charge the borrower a variety of fees, before closing.
These fees include: ORIGINATION FEES (1-6 points); ANNUAL fees (flat fee); VALUATION fees (appraisal); UNDERWRITING fees; DUE DILIGENCE fees; LEGAL fees; APPLICATION fees; PROCESSING fees; and ADMINISTRATION fees. Most Private lenders view these fees, paid before the loan closes, as a “test” of whether the borrower is serious.
In private commercial lending, the lender always requires a commitment fee of some sort, up front. This is usually done at the point where the lender has made an offer of rate and term to the borrower, and the borrower wants to accept the offer. These fees cover the costs of the formal offer and consequently the commitment on the part of the lender and are viewed as an indication of the borrower’s seriousness.
Iseetrust-Iseetrade receives many loan requests from the borrowers who not only waste their time by being unable to fulfill the requirements of the loan but are out to commit fraud against the funding source. We look at the up-front fee as a fraud prevention fee.
(Common fraud is after receiving a formal offer the client proceeds to borrow funds against the offer from many individuals and companies and walk away with the funds they collected from unsuspecting small investors) we have our stoppage for this type of fraud in place to protect the innocent.
As for the fees, once the client becomes known to us and we are convinced that they mean business we may significantly lower the fees to accommodate the needs of the client, thus making it easier to apply for a loan.
An example of how some commercial lenders charge fees:
“Interest Rates and Fees
Interest rates on commercial loans are generally higher than on residential loans. Also, commercial loans usually involve fees that add to the overall cost of the loan, including appraisal, legal, loan application, loan origination and/or survey fees. Some costs must be paid up front before the loan is approved (or rejected), while others apply annually. For example, a loan may have a one-time loan origination fee of 1%, due at the time of closing, and an annual fee of one-quarter of one percent (0.25%) until the loan is fully paid. A $1 million loan, for example, might require a 1% loan origination fee equal to $10,000 to be paid up front, with a 0.25% fee of $2,500 paid annually (in addition to interest).”
Above is an example for illustrative purposes.
Iseetrust-Iseetrade does not make personal or small loans please only get in touch for your megaprojects funding.
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