This probably sounds naive and maybe posted before but i have found a broker in my town that works with many HML’s. I’ve never heard or worked with him before and this would be my first deal.
He has found a lender for my deal but is requesting a $500.00 upfront processing fee for their legwork. Is this typical of HML Brokers or a scam.
I expected everything to be settled at closing until he sprung that on me but since this is not conventional financing is this possible.
TIA :rolleyes
SCAM, SCAM, SCAM, SCAM, SCAM. Run Newby Run!!!
Many HMLs will loan up 65% of ARV but at a cost. They will charge upfront points (sometimes as many as 15), and an interest rate that is double/triple what the bank charges. Many will defer all payments for six months with the ability to extend another six months.
Typically there will be an upfront fee… but it can usually be deferred. Payments are almost always interest only… again, can be deferred. And if you miss getting them their money back on time there are some stiff penalties.
I would ask him/her for some references. If he/she is legitimate then you will be better educated to make the decision.
Good Luck!