Private lending gives investors speed and flexibility that banks simply can’t match. But the fee structure is different—and without understanding it, borrowers may feel overwhelmed or misled. This guide breaks down every major private lender fee so investors can evaluate deals confidently.
1. Origination Points
Origination points (1–4% of the loan) are the primary revenue source for private lenders.
They compensate for:
- Quick closings
- Higher risk tolerance
- Flexible terms
- Asset-based underwriting
2. Underwriting & Processing Fees
These fees cover the lender’s internal work:
- File review
- Bank statement analysis
- Risk assessment
- Loan structuring
They typically range from $499 to $1,995.
3. Appraisal or BPO Costs
Appraisals and BPOs confirm property value or ARV.
Costs vary:
- Standard appraisal: $500–$700
- ARV appraisal: $850–$1,200
- BPO: $150–$250
4. Document Preparation Fees
These fees cover legal drafting of loan documents, notes, and disclosures.
Most lenders charge $250–$450.
5. Credit, Background & Compliance Fees
Small fees ($25–$75) that cover mandatory borrower verification.
6. Title, Escrow & Wire Fees
These are not lender fees—they’re third-party costs.
Typically:
- Title: $300–$700
- Wire fee: $30–$50
7. Broker Fees
If a broker is involved, expect 1–3 points.
Good brokers provide deal guidance, lender placement, and file preparation.
8. How to Evaluate Whether Fees Are Fair
1. Compare rate + points, not just rate
Always evaluate total cost.
2. Consider leverage and timeline
A fast close or higher LTV can justify higher fees.
3. Evaluate lender reputation
Good lenders cost more—but save you time and stress.
9. How to Reduce Fees Over Time
- Build experience
- Close multiple deals with the same lender
- Maintain a clean borrower profile
- Keep communication fast and professional
- Increase deal volume
Lenders reward strong long-term partners.
Final Thoughts
Private lender fees aren’t random—they’re structured around speed, risk, and service. Once you understand the fee categories, you can negotiate confidently, compare offers accurately, and make smarter financing decisions for your investments.
CONTACT;:WhatsApp: +1 448-230-7488
Email: annie@insightflending.com
phone no : +1-201-680-0991
