Hard Money Loan Fees You Should Know About: How Much Do Hard Money Lenders Charge?

Like all other conventional loan providers, commercial hard money loans also charge a loan fee before they issue you funds. Depending on the nature of your loan and your commercial hard money lenders, you can be subjected to various up-front charges.

last updated Sunday, July 13, 2025
#hard money loan fees #hard money lenders

by John Burson

Common Up-front Fees in Hard Money Loans You Should Know About

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As a real estate investor, you will need a commercial hard money loan to purchase or remodel a property. Like all conventional loan providers, commercial hard money loans also charge a loan fee before they issue you funds. The charge is measured in points, whereby one point equals one percent of the loan amount. The number of points you get will mostly depend on the complexity of your hard money loan and the agreement between you and your commercial hard money lenders.

Depending on the nature of your loan and your commercial hard money lenders, you can be subjected to some or all of the following up-front charges:

Appraisal Charges

This charge is processed through your commercial hard money lender to the appraiser.

Credit Report Charges

Commercial hard money lenders also cover the cost of credit report charges.

Commercial Hard Money Loan Underwriting Fees

This fixed amount is allocated directly to commercial hard money lenders to cover all expenses incurred during the loan underwriting process. The commercial hard money loan underwriting fee can range between $750 and $2,500.

Referral Charges

It's not uncommon for commercial hard money lenders to refer their clients to other lenders, particularly if they find one that may be better suited to handle the loan. In such a situation, you can be subjected to referral expenses, which will be transferred to the original commercial hard money lenders.

Document Preparation Expenses

Suppose your commercial hard money loan lenders have outsourced the task of document preparation to another company. In that case, these fees may also be passed through to your commercial hard money loan lender. However, some commercial hard money lenders prepare these documents in-house.

Late Income Fees

You must adhere to all the fee schedules outlined in the promissory note to avoid incurring late fees.

Commercial Hard Money Loan Servicing Fees

In most cases, commercial hard money loan servicing fees are set as a percentage of the loan's value, and in some cases, as a flat rate that is paid monthly throughout the life of the loan.

Equip Yourself before Consulting Your Commercial Hard Money Lenders

It's always essential to have a profound and thorough dialogue with your commercial hard money lenders about all expenses you may incur throughout the arduous money loan application process to ensure you don't incur any unexpected or surprise fees. Experienced and reputable commercial hard money loan lenders will brief you on all up-front fees, and working with such lenders during your real estate projects will help you get more insight into the system and build a solid foundation of trust and knowledge. Only contact commercial hard money lenders when you are ready to set your project in motion, and after confirming the up-front expenses you will incur in your loan application.