6 Questions to Ask Before You Pick a Lender

Rate is the first thing most investors ask about. These six questions tell you what the loan will actually cost you in time, cash, and certainty.

You are four deals in. You know your numbers, you know your contractor, and you know what a good spread looks like.

You are also under contract with a clock running, three term sheets open on your laptop, and every rate on the screen within a quarter point of the others.

So you pick the low one. And then you spend the next ninety days finding out what the rate never told you.

Rate Is the Easy Question

Rate is easy to compare because everyone publishes it. That is exactly why it rarely separates one lender from another. Upright quotes rates in the 8s and up to 92.5% loan to cost on RTL (Residential Transition Loan) financing, and so do a handful of serious shops.

What separates the experience is everything the term sheet does not put in a box: how the interest is actually calculated, who does the work between contract and closing, and what the full cost stack adds up to on the settlement statement.

Those are all askable. Here is how to ask them.

1. Who Does the Work Between Contract and Closing?

A fast closing is table stakes now. The real question is who is doing the work to get there.

Ask the lender to walk you through, specifically, what they handle and what comes back to you. Ordering title. Chasing the mortgagee clause. Reconciling the settlement statement. Getting the insurance binder right the first time.

At Upright, that work sits with your branch, the same small group of people on your file from application through your final Holdback release. One phone number, one email thread, no ticket queue. We wrote about why that structure exists if you want the longer version.

What a strong answer sounds like: a specific list of tasks the lender owns, not a promise to be responsive.

2. How Does Interest Accrue on This Loan?

Two mechanics inside a loan decide what the rate actually costs you, and neither one sits next to the rate on the term sheet.

The first is debt type. A Dutch loan charges interest on the full loan amount from day one, including the rehab dollars still sitting in the Holdback waiting to be released. A non-Dutch loan applies interest only to funds that have been disbursed. On a project carrying a large rehab budget, that difference outruns a quarter point of rate without much effort.

The second is whether the lender requires an interest reserve, a portion of the loan set aside at closing to cover your monthly interest payments. A reserve is loan proceeds, so you carry interest on it, and it comes out of the capital you wanted in the project.

Upright's loans are non-Dutch and we do not require an interest reserve. You pay interest on what you have actually drawn, and your proceeds stay in the deal.

Interest at a Glance

Debt type: Non-Dutch on every Upright loan
‍Interest charged on: Only funds that have been disbursed
‍Undrawn Holdback dollars: No interest until released
‍Interest reserve: Not required

What a strong answer sounds like: the words non-Dutch, and a straight yes or no on a reserve.

3. What Does a Holdback Release Ask of You?

Turnaround time is only half the number. If a funding request takes two hours of your time to assemble, a fast release is still an expensive one.

So ask what completing a Holdback release actually looks like from your side. How many photos. Which forms. Whether an inspection gets scheduled for you or by you. Whether you can submit from your phone at the property.

Our commitment is that a release funds in no longer than two business days from submission, and a large share fund the same day or the next. The part that matters more to your calendar is what you do to trigger one, which is upload from the portal and get back to work.

What a strong answer sounds like: a description of your five minutes, not just their 48+ hours.

4. How Close Is Your Lender to the Capital?

For a fix and flip or an infill new construction deal, every party between you and the money is another place a decision can stall.

Ask directly whether the lender is a direct lender, and expect a direct answer. Upright is. We hold the credit decision in house, backed by more than $2 billion in committed capital and over $8 billion funded across Upright and our partner organizations. When a file needs a judgment call at four o'clock on a Thursday, the person making it works here. We are not ejecting post origination either. Your dedicated branch remains with you, overseeing your project and successful exit.

What a strong answer sounds like: a clear yes, and a clear explanation of where the capital comes from.

5. Can the Same Lender Handle the Refinance?

If you are running BRRRR deals, the loan you close on is only half the plan. The exit is the other half.

Ask whether the lender can take you from the rehab loan through stabilization and into the long-term hold. Upright covers the full arc: RTL for the project, bridge if the property needs runway, and a DSCR rental loan, qualified on Debt Service Coverage Ratio rather than your personal income, when you are ready to hold it. Same relationship, same file, same people.

Full-Time Frank running four or five projects a year feels this one most. Every new lender relationship is a fresh entity review, a fresh experience verification, and a fresh explanation of how you work.

What a strong answer sounds like: the products named, and the handoff between them described.

6. What Are Your All-In Closing Costs?

Rate gets the attention. The cost stack is what hits the settlement statement.

Ask for the full picture in writing before you sign anything, by line item and by name: the origination fee, the underwriting fee, the Doc Prep Fee, and anything charged at or after closing. Then ask which of those change if your timeline moves.

A lender who can produce that list quickly is a lender who has it organized.

What a strong answer sounds like: a written itemization, same day, without a follow-up call to get it.

The Bottom Line

Rate is one line on a term sheet. The other six answers tell you what the loan costs to carry, what the next ninety days will feel like, and how much of them you will spend on the loan instead of the project.

Upright answers all six openly, in writing, before you commit to anything. If a term you run into on a term sheet is unfamiliar, our glossary has it in plain language.

Call (216) 206-6079 or start your application at uprightlending.com.