When closing on a property or refinancing a mortgage, a lot of effort and time is required from both the lender and the borrower. During these efforts, the lender will take care of all closing costs while compensating the lending company for its time and efforts. Hard money lenders, like IMC Money, will spend hours throughout the week coordinating appraisals, certifying documents, and working with underwriters to finalize mortgage approval.

As a result of the arduous process, there are quite a few different closing costs that are associated with hard money loans. Before signing up for a hard money loan, let’s take a look at some of the most common closing costs and fees that clients must handle when closing on a deal.

True Closing Costs of Hard Money Loans

Hard money lenders like IMC Money have to adhere to a different set of standards than institutional lenders. Institutional lenders must adhere to fierce and strict criteria while working with boatloads of money. Hard money lenders operate more as brokers, arranging each transaction as if it were a unique loan. Hard money lenders, as a result, have closing costs more similar to the traditional real estate brokerage experience.

Closing costs should account for between 2% and 5% of the loan’s total amount and this sum is taken care of at the closing of the loan’s transaction.

Let’s underline the most common fees that come during the hard money lending process.

Origination Fee

This fee is earned by the lending company for their work arranging, applying, and underwriting the loan and its transaction. Originator fees are often referred to among industry insiders as ‘points’ and hard money loans tend to offer more points than conventional loans. The reasoning? Hard money lenders like IMC Money are undertaking more risk than their conventional lending counterparts.

Processing Fee

Common amongst lenders, processing fees are for the handling and delivery of all items to title companies, property record loan transactions, or escrows. Processors ensure that all paperwork has been completed as necessary.

Underwriting Fee

Hard money loans are secured by actual property as a source of collateral. To secure a collateral property for a real estate transaction, an underwriter must detail a binding legal agreement. These fees are often built into the originating fee.

Legal Fees

More complicated transactions may require lawyers to ensure the document is valid, compliant, and legal.

Tackle Hard Money Loans with IMC Money

IMC Money operates as a full-service real estate lending company for the acquisition and development of financing and hard money lending for residential and commercial developments. Originally founded in 1993, IMC Money has developed into one of the most prominent hard money lenders in the region.

Apply for a loan today with IMC Money to unlock the investment of your dreams!