What Investors Should Know About Lenders, Points, and Legitimacy

We have been on every side of this: borrowing on our own 100+ projects, and arranging loans for investors through Aspire Mortgage. The private lending space has excellent operators and outright fraudsters wearing the same website template. This is the vetting checklist we would give a family member.

What Points Actually Are

One point equals 1% of the loan amount, paid at closing. On bridge and fix-and-flip loans, origination of a few points is standard compensation for short-term, higher-touch lending. Points paid at closing, on a closing statement are the industry working normally. The structure of the fee matters more than its existence.

Red Flags That Mean Walk Away

• Big fees before a term sheet. Legitimate costs before closing are third-party: appraisal, sometimes a modest processing deposit. Thousands in “commitment” or “due diligence” fees to an unverifiable lender is the classic advance-fee scam.
• Guaranteed approval. No real lender guarantees approval before underwriting. Ever.
• No verifiable footprint. No NMLS record where applicable, no closed-deal references, no title companies that know them, pressure to wire fees fast.
• Terms that beat the whole market. Pricing dramatically below every other quote is bait, not a bargain.

How to Verify a Lender or Broker

• Look up NMLS registration on nmlsconsumeraccess.org where licensing applies — ours is #2783873, and any legitimate shop will hand you theirs without flinching.
• Ask for two or three recently closed transactions and call the title companies involved.
• Get the fee structure in writing on a term sheet before paying anything beyond third-party costs.
• Ask what happens to any deposit if the loan does not close — and get that in writing too.

Broker vs. Direct Lender, Honestly

A direct lender funds from its own box. A broker like us shops your file across many wholesale lenders and gets paid, transparently, for placing it well. Both models are legitimate; the question is always whether the fees are disclosed, contingent on closing, and on paper.

Frequently Asked Questions