Start here: who is actually lending the money?
Ask, and ask for the answer in writing. Online, a lender and a firm that arranges financing can look identical, and the difference changes your cost and your certainty.
A direct lender
Funds the loan with its own capital or credit lines and controls the timeline. There is no intermediary between you and the decision, and if you already know its rates, turnaround and appetite, that can be the fastest route. The trade-off is a single set of terms: you see one lender's answer, not the market's.
A firm that arranges financing
Places your file with one or more lenders. Worth it when the deal is unusual, when one lender's guidelines would decline something another would fund, or when you do not have time to approach six lenders yourself. The risk is a firm that promises financing it has no power to approve. Only the lender decides.
The nine red flags
Every one of these appears again and again in lending-fraud warnings. Any single one is a reason to slow down.
- Large fees demanded before anyone has looked at the deal. An appraisal or credit report has an invoice behind it. A big "processing" or "commitment" payment before written terms is the pattern the Federal Trade Commission warns about.
- A quote that will not be put in writing. The clearest signal of all.
- A rate that moves after the quote. Confirm whether the rate is fixed and documented or only indicative.
- Approval promised before anyone has seen the property. Every real loan is underwritten. A promise made before that is a sales line.
- Stacked vague line items. "Processing fee", "document fee", "administrative fee", "underwriting fee" sitting together. Ask what each one actually pays for.
- Pressure to sign the same day. Urgency benefits the lender, not you.
- No named person accountable for the file, and no registration you can check where your state requires one.
- No documented past deals. Ask for recent closings similar to yours. A real lender can describe them.
- Unusually high leverage with no explanation. An offer far above what other lenders quote often carries hidden cost somewhere else in the paperwork.
One more, and it says something about culture rather than fraud: a lender who refuses to look at you purely for being new, on a deal with strong numbers. Good lenders price inexperience. They do not refuse to look at it.
Have a deal on the table?
Send the address, the numbers and your exit. Our lending partner's team reviews it and tells you whether it fits and on what terms. The lender makes every credit decision.
How to vet one properly, in four steps
If real money is going out before closing, have a real estate attorney read the documents first. Paperwork is enforceable once signed, and recovering an upfront fee afterwards is close to impossible.
Does "near me" actually matter?
Less than people assume, and more than nothing.
Where local helps: a lender who knows your market values it more accurately, because they have seen what actually sells on those streets and how long it took. On an unusual property or a thin market, that knowledge is worth real money.
Where it does not: the loan is secured on the property, not on proximity to an office. National lenders fund across state lines every day, and a national program whose guidelines fit your deal beats a local one whose box it does not.
What actually matters is that a named person is accountable for your file and answers the phone. "Local" is a proxy for that, and a poor one. Ask instead who is handling your loan, and whether you will be speaking to that person or to a queue. There is more on this in what a local lender actually buys you.
Ten questions worth asking on the first call
- Are you the lender, or do you arrange financing through lenders? Will you confirm that in writing?
- Which state licenses or registrations apply to you, if any, and where can I check them?
- What is the rate, and is it fixed at quote or indicative?
- How many points, and what else is charged at closing?
- Is there a prepayment penalty?
- What does an extension cost, and how is it triggered?
- How are rehab draws released, how long do they take, and what does each inspection cost?
- Realistically, what has to happen between a complete file and funding, and what usually slows it down?
- What is your maximum leverage, and is it measured against value, cost or after-repair value?
- Can I speak to two borrowers you closed for this year?
Any lender worth using answers all ten without hesitating. Our lending partners' own numbers are a useful benchmark: fix and flip and bridge pricing from 12.99 percent plus 2.99 points as standard, loans from $50,000, a 600 minimum score, and leverage up to 100 percent of cost and 70 percent of after-repair value, whichever is lower. Loyalty pricing of 10.99 percent plus 1.99 points follows two loans paid off in good standing.
Get your deal reviewed
Answer these and your deal goes to our lending partner's team, who will contact you about whether it is fundable and on what terms. By sending it you agree to your details being shared with them. Investment property only: our lending partners do not finance a home you will live in.
Got it.
Thank you. Your details are on their way to our lending partner's team, who will contact you shortly.
Choosing a lender: common questions
How do I know if a hard money lender is legitimate?
Check any license or registration it holds on NMLS Consumer Access, ask about recent comparable closings and borrowers you can call, and require every cost in writing before you commit. A quote that will not be documented is the clearest warning sign there is.
Should I use a direct lender or a company that arranges financing?
A direct lender gives you one set of terms and a straight line to the decision. A firm that arranges financing is worth it when the deal is unusual or you do not have time to approach several lenders yourself. Either way, ask which one you are dealing with and get it in writing.
Is it a red flag if a hard money lender wants money upfront?
A small, invoiced cost like an appraisal is normal. A large fee to "secure" or "lock in" funding before you have written terms is the classic advance-fee pattern, and money paid that way is rarely recovered.
Do hard money lenders need a license?
It depends on the state and the loan. Licensing for business-purpose real estate lending is set state by state, and many states do not require it. Where a company does hold a license, you can usually look it up on NMLS Consumer Access or the state regulator's site.
What questions should I ask before choosing a hard money lender?
Who is lending the money, the rate and whether it is fixed, the points and every closing fee, any prepayment penalty, the extension cost, how draws work, and the maximum leverage and what it is measured against. Ask for references too.
Is it bad that Dominion Hard Money does not lend its own funds?
It is a structure, and we would rather state it than obscure it. Dominion Hard Money arranges financing through third-party lending partners, who underwrite and decide every file. You get their full set of programs through one conversation.
Sources
- NMLS Consumer Access, free lookup of state licenses and registrations for mortgage companies and loan originators (accessed Oct 2026)
- Federal Trade Commission, advance-fee loan scams, upfront fees and loans promised before review as warning signs (accessed Oct 2026)
- CFPB, Regulation Z 12 CFR 1026.3, business-purpose credit sits outside the federal consumer mortgage rules, leaving lender regulation largely to the states (accessed Oct 2026)
Dominion Hard Money does not lend its own funds; it arranges financing through third-party lending partners. All financing is arranged for business purposes only and secured by non-owner-occupied investment property. Not a commitment to lend. All loans subject to underwriting, property review, and approval by the lender. Terms vary by property, borrower experience, and exit strategy.