The decision in brief
Before choosing a hard money or fix and flip lender, ask about leverage, total cost in dollars (rate, points, every fee), how draws work and how fast they fund, closing timeline, term and extensions, prepayment, and who makes the decision. Get answers in writing and compare quotes in total dollars over your expected hold.
View Fix and Flip Loans →Why do these questions matter?
The lowest rate isn't always the cheapest loan, and the highest leverage isn't always the best one. The right questions show the difference.
Two quotes with similar rates can differ by thousands of dollars once you add points, fees, draw costs, and extension terms, and they can differ even more in how well they fund your project on time. You're choosing a partner for months of work, not just a price.
The lender interview checklist
Leverage and sizing
- What percentage of the purchase price will you fund at my experience level?
- What percentage of the rehab will you fund?
- What's the maximum loan as a percentage of ARV?
- How do you determine ARV and as-is value? Appraisal, broker opinion, internal review?
- Are there minimum or maximum loan amounts or property values?
- What property types and locations do you lend on?
Cost
- What is the interest rate, and is it fixed for the term?
- Is interest charged on the full loan or only on funds drawn?
- How many points, and are they charged on the full loan amount?
- What other lender fees apply (underwriting, processing, document, wire)?
- Are there draw or inspection fees?
- Is there a prepayment penalty or minimum interest period?
- Can you give me a full estimate of closing costs in dollars?
Draws
- How are rehab funds held and released?
- How fast are draws typically funded after a request?
- What does a complete draw request include?
- Who inspects, and how is the inspection scheduled?
- Is any rehab money available at closing?
- How are change orders and budget reallocations handled?
Timing
- How long from complete application to terms?
- How long from terms to closing, realistically?
- What usually delays your closings, and how can I avoid it?
Term, extensions, and payoff
- What's the loan term, and when are payments due?
- Are extensions available, and on what terms?
- What happens if the project runs past maturity?
- How do I request a payoff statement, and how quickly is it issued?
Who you're working with
- Are you a direct lender, or will my loan be brokered to another lender?
- Who makes the final credit decision?
- Will my loan be serviced by you or someone else?
- Who is my point of contact during the rehab?
Where can you see Axelrad's program details?
Axelrad's current program details are on the fix-and-flip page and the hard money page. Published figures are program descriptions or maximums, not a quote. Ask for the specifics on your deal in writing, from every lender you compare.
Quote comparison template
For each lender, use the same deal and the same expected hold. Total cost of capital is the sum of points, other fees, draw and inspection fees, interest over your hold, extension cost and prepayment cost, in dollars. Leave a cost blank if it does not apply.
Quote comparison
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Lender A
Lender B
Lender C
Difference
Record the rest of each quote, the items that are words, dates or loan size rather than cost, in the template below.
Quote details to compare
Fill it in, then copy it into your notes or an email. Your entries stay in your browser and are not sent anywhere. They reset when you reload.
Example (hypothetical numbers): Lender A's rate is lower, but it charges interest on the full loan from day one plus per-draw inspection fees. Lender B's rate is higher, but it charges interest only on drawn funds and no draw fees. On a large rehab with late draws, B can cost less in total. Only the dollar column tells you.
What are red flags in a hard money lender?
- Large upfront fees before you have written terms
- Vague answers about who funds the loan
- Pressure to sign before you've seen full costs
- Terms that change significantly close to closing without a clear reason
- No clear answer on draw process or timing
A lender who answers these questions clearly and quickly, before you're under pressure, is showing you how the rest of the loan will go.
Key takeaways
- Ask about leverage, total cost, draws, timing, extensions, and who decides.
- Compare quotes in total dollars over your expected hold.
- Interest basis (full loan vs. drawn funds) and draw fees can swing total cost.
- Get every answer in writing for your specific deal.
Ask us the same questions
We'd rather you compare. Bring this list when you submit your deal, and review the fix-and-flip loan page for current program details.
Frequently asked questions
What should I ask a hard money lender?
Ask how much they'll fund (purchase, rehab, ARV cap), the full cost in dollars, how draws work, closing and draw timing, term and extension options, prepayment, and whether they're a direct lender.
How do I compare hard money loan offers?
Use the same deal and hold period, convert every cost to dollars, and add them up, along with your cash to close and realistic timing.
Is a direct lender better than a broker?
A direct lender makes its own decisions on the programs it funds, which can mean faster answers. Brokers can offer access to more programs. Know which you're dealing with.
What fees do hard money lenders charge?
Commonly points and various lender fees, and sometimes draw or inspection fees. Ask every lender for a full itemized estimate.
Should I pick the lender with the highest leverage?
Not automatically. High leverage with expensive terms or slow draws can cost more than slightly lower leverage with a reliable process.
Plan your next step
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