Before choosing a lender, don't be afraid to ask questions.

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Mike GrudzienPro Member
Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
2d

You better ask a lot of questions, not one question.

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  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    2d

    You better ask a lot of questions, not one question.

    1Reply
  • Noah WrightBusiness Member
    USA, Nationwide · Member since 2024 · 218 posts · 96 votes
    2d

    Fees is the one I'd push hardest on, because the points are often the only cost quoted up front. Ask for a written fee sheet with every line on it, origination, underwriting, processing, doc prep, and on a rehab loan the inspection fee per draw and what an extension costs. On a DSCR loan, ask about the prepayment penalty too, since many of the programs I see carry one. Then compare that sheet to the estimated settlement statement before signing, because that's where extra line items tend to show up. Two offers with the same rate and points can end up well apart once everything is written down. The cheaper loan is the one with the lower total cost, not the lower rate.

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    • Siahna ImBusiness Member
      OP
      Lender · Lakewood, WA · Member since 2021 · 82 posts · 29 votes
      1d

      Great point! The total cost of the loan can make a big difference, especially when unexpected fees or extension costs come into play. Getting everything in writing upfront helps investors compare options and avoid surprises at closing. Beyond fees, do you also ask lenders how they handle unexpected rehab costs or project delays?

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  • Divin KanyamaBusiness Member
    Accountant · Seattle, WA · Member since 2025 · 470 posts · 188 votes
    2d

    @Siahna Im I’d ask for the full cost in writing—not just the interest rate. What fees are due upfront, how draws work, whether interest applies only to money drawn, and who pays for inspections and extensions?

    I’d also confirm the term, payment schedule, prepayment rules, and exactly what happens if the project runs long. Can you extend, what will it cost, and is approval guaranteed or up to the lender?

    My one must-ask question: “What could cause you to stop funding draws or refuse an extension, even if I’m current?”

    That answer usually tells you more than the sales pitch. And if it matters, make sure it’s in the loan documents—not just promised verbally.

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    • Siahna ImBusiness Member
      OP
      Lender · Lakewood, WA · Member since 2021 · 82 posts · 29 votes
      1d

      That’s a great point! The question about what could stop draws or prevent an extension is especially important because it helps investors understand the risks before committing. Getting those details in writing can prevent a lot of surprises down the road. Have you ever seen a deal run into trouble because those terms weren’t clear upfront?

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