Fix and Flip Loan Closing Costs Explained

Origination fees, expressed as 'points,' are the lender's primary compensation for underwriting and funding your loan. LYNK Mortgage and similar hard money lenders typically charge 1–3 points, with 2 points being common for fix-and-flip deals. One point equals 1% of the loan amount; on a $200,000 loan, 2 points cost $4,000. Origination fees cover the lender's underwriting, appraisal ordering, title work, compliance review, and funding coordination. These fees are non-negotiable with most lenders but vary by lender, loan amount, and your experience level. Larger loans often have lower per-point fees; experienced investors may negotiate better rates. Some hard money lenders roll origination fees into the loan amount, adding them to your loan balance and increasing your total debt and interest costs. LYNK Mortgage doesn't: closing costs aren't counted in LTC and are paid in cash at closing. Calculate total cost impact: a 2-point fee on $200K costs $4,000, compounded by interest over 12 months—total interest cost varies but adds significantly to your all-in rate.

Appraisals cost $400–$800 and assess the current property value and your projected ARV. LYNK Mortgage orders the appraisal during underwriting, and the fee is part of your closing costs. Title search and title insurance ($800–$1,500) verify ownership, search for liens, and insure the lender against title defects. A title company coordinates closing, prepares documents, collects signatures, and holds funds in escrow until all conditions are met. Escrow costs are typically $300–$600 and are included in title company fees. Lender's title insurance (different from owner's title insurance, which is optional) protects LYNK Mortgage's interest and is required. These costs are industry-standard; shopping between title companies may save $100–$300 but not dramatically. Many lenders have preferred title companies and may require using them, limiting negotiation. Plan for title and escrow as a bundle cost of $1,000–$2,500 per closing.

Beyond appraisal and title, closing involves miscellaneous fees: credit report ($25–$75), property survey ($300–$600 if required), environmental assessment ($200–$500 if needed), recording fees ($100–$300), insurance binder ($0 if paid separately), and attorney review if required ($300–$500). Some lenders charge processing fees ($200–$500), loan documentation fees ($100–$250), and notary fees ($50–$100). These accumulate; total miscellaneous costs typically range $1,000–$2,000 depending on property complexity and lender requirements. Unusual properties (commercial, mixed-use, environmental concerns) trigger additional assessments and fees. Straightforward single-family flips have minimal miscellaneous costs. Ask LYNK Mortgage for a complete closing cost estimate before committing, ensuring no surprises. Some costs can be negotiated or reduced; others are fixed by third parties and non-negotiable. Get a written, itemized closing cost estimate detailing all costs before closing.

Total closing costs for a typical fix-and-flip loan range 3–6% of the loan amount. A $200,000 loan has closing costs of $6,000–$12,000. Some hard money lenders roll these into your loan balance, which increases your total debt and interest expense. LYNK Mortgage doesn't: LTC is calculated on the purchase price plus the rehab budget, so closing costs are paid in cash at closing. If you're acquiring for $150,000 and rehabbing for $100,000, your project cost for LTC is $250,000—and the loan is also capped at a share of the as-is value and of the ARV, with the lowest limit setting your loan amount. At 85% LTC the loan is $212,500, so with $7,000 of closing costs you'd bring $37,500 plus $7,000, or $44,500, to the table. Accurate closing cost estimates matter because they come straight out of your cash. Some investors negotiate points or fees during underwriting, particularly on larger loans or if they have strong track records. However, most lenders have fixed fee schedules, leaving limited room for negotiation. Plan conservatively for closing costs and avoid being surprised; closing cost overruns reduce your borrowing capacity and profitability.