Questions to Ask a Bridge Lender Before You Commit

Why do these questions matter more on a bridge loan?

Use the checklist below with every lender you're considering, Axelrad Capital included.

Bridge loans are short, and the lender is involved during the hold: releasing draws, processing extensions and sending payoff letters. A lender that's slow or vague at any of those points can cost you time, and on a bridge loan, time is interest. A lender that answers clearly before closing is more likely to be clear afterward.

Who is the lender, and who makes decisions?

Start here, because it affects everything else:

• Is this a direct lender that funds the loan, or a broker arranging it with someone else?
• Who makes the final credit decision, and can you talk to them?
• Who services the loan after closing: draws, payments, payoffs?

Axelrad's Bridge Loans page describes the company as a "Direct Lender - No Middlemen," and its application page says "you talk to the decision-maker." Ask any lender to confirm the same in writing.

How do leverage and costs work?

Ask how LTC (loan-to-cost: the loan divided by purchase price plus renovation budget) and LTV (loan-to-value: the loan divided by property value) are calculated, and which costs count. Then ask for every fee in writing. Axelrad's homepage FAQ lists no draw fees and no prepayment penalties on bridge loans. It doesn't publish bridge rates or points. Those come on the term sheet.

How does the term work?

Ask for the exact term and maturity date, plus extension options. Confirm your term in writing with any lender, and don't rely on marketing ranges. See the Bridge Loans page for current program terms.

Bridge lender comparison checklist

Use one template per lender. The questions run in order: lender basics (1 to 5), leverage and cost (6 to 13), process and timing (14 to 18), draws (19 to 22), term, extension and payoff (23 to 27), and fit (28 to 30). Write each lender's answer, ideally from its written term sheet.

To compare cost, the total cost of a quote is its points in dollars, plus interest over the hold, plus all fees. Interest is the average balance outstanding times the rate times the months divided by 12. If a lender charges interest on the full loan, enter the full loan amount as the average balance. If it charges only on drawn funds, enter the average drawn balance.

How should you compare the answers?

• Total cost over a realistic hold, including points, interest (on drawn or full balance) and fees.
• Cash to close, at the leverage actually offered.
• Timing risk: closing speed, draw speed and extension terms.
• Clarity: did the lender answer in writing, specifically?

Example: the cheapest quote that wasn't (hypothetical)

Example for illustration only. Lenders A and B are generic, not Axelrad.

An investor compares three bridge quotes. Lender A has the lowest rate, but charges interest on the full loan, charges a fee on every draw and offers no extension. Lender B's rate is slightly higher, but it charges interest only on drawn funds, has no draw fees and includes a written extension option. On a nine-month project with five draws, Lender B comes out cheaper in total. It also has the better answer to "what if it runs long?"

What warning signs should you watch for?

• Upfront fees before you see a term sheet.
• Vague answers on who funds the loan.
• Terms that change at closing with no explanation.
• No written draw process.
• Pressure to sign before you've reviewed the documents.

How do you check a lender's answers?

Get everything material in writing, ideally on the term sheet. Then check it two ways. First, compare the written answers with what you were told on the phone. Any difference is worth asking about before you go further. Second, look for outside signals: reviews, how long the lender has been operating, and whether past borrowers would work with them again. Axelrad publishes customer reviews on its site. For any lender, a willingness to answer the hard questions clearly, and in writing, is one of the best signs you'll get.

Key takeaways

• Ask who funds, who decides and who services the loan.
• Get leverage definitions and every fee in writing.
• Draw process and extension terms matter as much as rate.
• Compare total cost over a realistic hold, not headline rate.
• Confirm the term and maturity date in writing.

Ask us the hard questions

Run Axelrad through this checklist. Start an application, read about the team on the About page, or see customer reviews. General education only. Not legal or financial advice.