5 min read
Questions to Ask Before Choosing a Private Lender
A practical checklist for comparing lenders beyond the headline rate.
The advertised rate is only one part of what a private loan will actually cost you — and how smoothly it will close. These questions can help you compare lenders more completely.
About the offer
What is the full breakdown of rate, points, and fees? Is the quote conditional, and what could change it before closing? What is the actual, all-in cost of borrowing, not just the headline rate?
About the process
What documentation will be required, and when? What is a realistic closing timeline for a deal like yours, not just a best-case number? Who is your point of contact once you've submitted a deal, and how do they communicate?
About renovation and servicing
If your deal includes a rehab budget: how are draws requested and inspected, and what's the typical turnaround? If your timeline slips, does the lender offer an extension, and what would it cost?
About the lender
How long has the lender been operating, and in which states? Is the lender licensed where required, and can they answer questions about that directly? Can you speak with an actual person before you commit, rather than only interacting through a portal?