Is it customary to pay a Due diligence fee prior to receiving funds for a hard money loan? I’m a little skeptical about paying for a loan. :o
I paid a structural and engineering inspector as part of the HML requirements but I never pay the lender directly. You will also have to pay for the appraisal upfront too.
If you see my sad tale elsewhere in this forum you’ll see that it is not a wise idea to pay any type of upfront fees directly to the lender. My personal situation was with a private lender (who now faces the wrath of the Attorney General of Texas) and involved paying consultation fees before the loan was granted (and no loan was ever granted). If the fees involve paying an outside party to do an appraisal or inspection (or a simple application or credit check), fine… but be wary about paying the potential lender any type of upfront fees.
If anyone requires cash upfront watch out. Find a different lender or a broker who can lead you to a lender who will treat you well.