Lender charges
Identify origination, application, underwriting, servicing, exit and extension charges. Check minimum-interest provisions and when deposits become nonrefundable. Compare the full proposed cost over your planned holding period.
Diligence and documentation
Obtain estimates for legal work, appraisal, environmental and property condition reports, title, survey and any specialist reports the lender requires. A quoted loan rate does not include all of these expenses.
Taxes, reserves and cash needed at closing
Ask the title or closing professional to calculate applicable recording and transaction charges. Keep reserves distinct from fees: reserves affect initial cash requirements, and their release or use depends on the loan documents.
Advisory compensation
MCM’s debt placement fee is agreed in writing and due only if the loan closes. Third-party expenses are separate and may be payable earlier.
Keep fees, reserves and payoff costs in separate rows
Fees compensate a lender, advisor or service provider. Reserves are funds set aside under the loan terms for specified uses. Payoff costs relate to retiring the existing financing. Each affects cash at closing, but they should not be treated as interchangeable expenses.
A useful closing budget lists the payee, the estimate, when payment is due and whether the amount is refundable. Update estimates when reports are ordered, terms change or the lender issues a revised closing statement.
Build a usable comparison
Suppose two loan proposals show the same gross proceeds. One may require more cash for repairs or leasing reserves, while the other may have a higher origination fee. Compare usable proceeds after both fees and required reserves, then review the conditions for releasing reserved funds.
Include costs that occur after closing, such as servicing, extension or exit charges, where applicable. Use your expected holding period so a low upfront cost does not obscure a later obligation.
Discuss your property financing or explore sponsor consulting.