Fix and flip loan points and fees are how a 10.25% quote becomes a 13% all-in cost — or how a “cheap” 8% teaser with 3 points loses to an 11% file with half a point. The coupon on fix and flip loan rates is only one line. This page is the rest of the term sheet.
Jaken Finance Group prices qualified files at 8.99%–13.5% interest-only. Origination is typically 0–3 points depending on the file. Nothing here is a junk-fee lecture. It is a model-before-you-sign guide.
If you already modeled the coupon on fix and flip loan rates, this is the rest of the cost: what will this actually cost to open, carry, and close?
What a point is
One point = 1% of the loan amount, usually earned at closing.
| Loan | 0.5 pt | 1 pt | 2 pts | 3 pts |
|---|---|---|---|---|
| $150,000 | $750 | $1,500 | $3,000 | $4,500 |
| $220,000 | $1,100 | $2,200 | $4,400 | $6,600 |
| $400,000 | $2,000 | $4,000 | $8,000 | $12,000 |
Points are prepaid interest with a worse cash-flow shape than the coupon. You pay them whether you sell in 60 days or 12 months. The coupon you pay only while the balance is out.
Rate vs. points — the only comparison that matters
Same $220,000 loan, interest-only, no extension:
| Hold | 10.25% + 2 pts | 11.25% + 0.5 pt | Winner |
|---|---|---|---|
| 3 months | $5,638 int + $4,400 pts = $10,038 | $6,188 + $1,100 = $7,288 | Higher rate |
| 6 months | $11,275 + $4,400 = $15,675 | $12,375 + $1,100 = $13,475 | Higher rate |
| 10 months | $18,792 + $4,400 = $23,192 | $20,625 + $1,100 = $21,725 | Higher rate |
| 12 months | $22,550 + $4,400 = $26,950 | $24,750 + $1,100 = $25,850 | Higher rate |
On this pair, 0.5 point at 11.25% wins every hold. A different pair (9.99% + 3 pts vs 10.75% + 1 pt) flips if you hold long enough. Do not memorize a rule. Run the two term sheets.
Calculator: fix and flip calculator · how to use it. Subtract points from net if the UI has no points field.
Fees that are not points (and still real)
| Fee | What it pays for | How to keep it honest |
|---|---|---|
| Origination / points | Lender capital and desk | On the term sheet |
| Underwriting / processing | File work | Flat vs % — ask |
| Valuation | Appraisal, BPO, or interior | Who orders, who pays, rush fees |
| Title / escrow | Closing | Shop the closer; investor files differ |
| Recording / transfer | County | Not the lender’s “junk fee” |
| Builder’s risk | Vacant rehab | Bind before first draw |
| Draw / inspection | Third-party inspector | Per draw; budget 4–6 |
| Wire | Bank | Small; confirm instructions by phone |
| Extension | Extra 30–90 days | Know this at term sheet |
| Minimum interest | Floor carry | 3–6 months common |
Jaken Finance Group discloses points, extension language, and minimum interest on the term sheet before processing. If a shop wants a large “commitment fee” before you have a term sheet, walk. Red flags: hard money lender red flags.
Minimum interest is not a prepay penalty
Consumer mortgages punish early payoff. Most investor bridge notes want you to sell. The friction is minimum interest: if you exit in week six on a note with a three-month minimum, you still pay three months of IO.
That can still be correct on a 45-day cosmetic flip — if you modeled it. It is a problem if you thought “interest-only” meant “only the days I held.”
Extension fees — the fee that shows up at month seven
A 6-month note on a permit-heavy gut is mispriced on day one. Extension is usually:
- A flat fee, or
- A rate bump, or
- Both
plus more IO. If you already know the city takes 90 days for a deck permit, start on a 12-month term. Rescue path if you are already late: hard money maturity refinance.
Draw fees vs. GC idle time
Inspection-and-release cycles run 3–5 business days after a clean inspection. Some lenders charge a draw fee; some fold it into points. A $350 draw fee on five draws is $1,750. A GC sitting a week because you submitted photos late is one month of IO — often larger. Draw process.
Worked HUD-1 style — Fort Wayne composite
| Line | Amount |
|---|---|
| Loan | $161,500 at 10.75% IO |
| Hold | 7 months |
| Interest | ≈ $10,120 |
| Origination 1.5 pts | $2,423 |
| Valuation | $650 (example third-party) |
| Draw inspections × 4 | $1,200 |
| Title / escrow (buyer side, example) | $1,800 |
| Finance + close friction | ≈ $16,200 before sale costs |
Sale costs (8% of ARV) are not lender points. They still come out of your net. Keep them in the calculator so you do not “save” 50 bps and give away $18,000 at listing.
Regional: Indiana fix and flip.
How competitor teasers hide points
Kiavi rates and Lima One “from 7.25%” pages sell the coupon. Institutional files still have origination. Ask:
- Points on this LTC?
- Can points be deferred to exit (some shops market this — it is not free)?
- Minimum interest?
- Extension menu?
- Who pays the appraiser if the deal dies?
If they will not answer in writing, you do not have a rate. You have an ad.
How to read a Jaken Finance Group term sheet
Look for, in one place:
- Rate inside 8.99%–13.5%
- Loan amount vs 75% ARV
- Points (0–3 typical)
- Term (6–12 months)
- Minimum interest
- Extension terms
- Draw inspection process
- Conditions (insurance, entity, appraisal)
Then rerun the calculator on those numbers, not the ones you wished.
Cash points vs rolled points
Cash at close is simple. You wire points with the down payment and title bill. Your loan amount stays the purchase-plus-rehab figure you modeled.
Rolled points increase the balance. One point on a $220,000 request becomes $2,200 added to the loan — if leverage still clears 75% ARV and the LTC cap. You then pay interest on that $2,200 for the whole hold.
Example: $220,000 need + 2 points rolled = $224,400 requested. If 75% of ARV is $222,000, the roll does not fit. You pay the overflow in cash or you cut leverage. This is how “0 cash points” marketing still requires a check.
Deferred-to-exit points (some shops market this) are not a gift. They are points plus carry, collected at sale or refinance. Ask for the dollar amount on the term sheet, not the slogan.
Worked file — Houston light rehab, points vs cash-in
| Line | Number |
|---|---|
| Purchase | $210,000 |
| Rehab | $38,000 |
| All-in cost | $248,000 |
| ARV | $310,000 |
| 75% ARV | $232,500 |
| Loan | $232,500 (ARV binds; cash in = $15,500 plus close costs) |
| Hold | 5 months |
| Structure | 5-month IO | Points | All-in finance | Cash due besides down payment |
|---|---|---|---|---|
| 10.25% + 2 pts cash | $9,939 | $4,650 | $14,589 | $4,650 points |
| 11.00% + 1 pt cash | $10,656 | $2,325 | $12,981 | $2,325 points |
| 11.50% + 0 pts | $11,141 | $0 | $11,141 | $0 points |
On a five-month hold, zero points at 11.50% wins this pair. That is not a universal rule. A 12-month gut with a 9.99% + 2 pt sheet can flip the ranking. Texas fix and flip and the calculator walkthrough are where you rerun it.
100% LTC files still pay points
100% financing is the leverage page. Points do not disappear because LTC is 100%. If the desk allows points to roll, the 75% ARV cap still has to fit the larger balance. If it does not, points are cash — even on a “no money down” purchase-plus-rehab story.
A $180,000 cost file at 100% LTC on a $230,000 ARV: 75% of ARV is $172,500. You are not at 100% of cost. You are at $172,500 plus whatever cash covers the gap and the points. Model the gap first. Argue the coupon second.
Title, insurance, and fees that look like lender junk and are not
Investor closings are not purchase-mortgage HUD-1s. Expect:
- Owner’s title policy quotes that assume a vacant, just-bought asset
- Municipal transfer or water certifications in Cook County and some Indiana towns
- Builder’s risk on a vacant rehab — bind it before the first draw, not after the first storm
- HOA estoppel on condos and townhomes — hard money condos
None of those are origination points. They still leave your checking account. Budget them as close friction, then keep lender points in their own column so you can shop desks fairly.
Broker spread vs a direct term sheet
A broker can be worth a point if they get a complete file funded on a short clock. A broker who marks up a wholesale rate and adds a point on top of the lender’s point is a different product. Ask:
- What is the lender’s origination?
- What is your broker fee, in dollars?
- Are those stacked or inclusive?
Jaken Finance Group quotes the desk you are talking to. If you came through a broker, get both numbers in writing. Hard money lender red flags covers shops that will not split the fee.
How to negotiate points without sounding like a rate shopper
You can ask. Bring a reason the file is cheaper to hold:
- Lower LTC (you are putting more cash in)
- Three tight sold comps, not pending listings
- A licensed GC with a dated bid, not a napkin
- A 12-month term request on a known-slow permit path (less extension risk)
- Repeat HUD-1s from the last 24 months
You cannot negotiate away valuation, title, or county recording. You can sometimes trade rate vs points on the same leverage. Use the tables above. A shop that only cuts points by raising LTC is not doing you a favor.
After you sign — what to watch on the first draw
Points are paid. The next fee cycle is draws. A $350 inspection on a five-draw job is $1,750. A week of GC idle time because photos were late is often larger than that entire inspection budget. Fix and flip draw process is the operations page.
If month six arrives and the house is not listed, you are in extension math. That fee was on the term sheet. Read it again before you call angry.
Fix and flip loan points and fees FAQ
What are typical fix and flip loan points?
Origination commonly runs 0–3 points on investor hard money. One point equals 1% of the loan amount, due at close or sometimes rolled. Jaken Finance Group discloses points on the term sheet before processing — not as a surprise on the HUD-1.
Are points better or worse than a higher rate?
On a short hold, extra points often cost more than a higher coupon. On a 10-month gut, rate dominates. Run both on the same loan amount and hold months before you pick a structure.
What other fees should I expect?
Underwriting or processing, appraisal or valuation, title and escrow, insurance, possible inspection/draw fees, and extension fees if you overrun the term. Ask for a fee sheet with the term sheet.
Does Jaken Finance Group charge a prepayment penalty?
Most investor bridge notes allow payoff at sale without a consumer-style prepay penalty. Confirm minimum interest (often 3–6 months) on your term sheet. That is prepaid carry if you exit early, not a hidden junk fee — if you read it.
Ask for the fee sheet with the rate
Pre-qualify or call (833) 264-7776. Bring purchase, rehab, ARV, and the hold you actually believe.
Further reading: how to get a loan · Lima One requirements · interest-rates hub.
Rates, terms and conditions offered only to qualified borrowers and are subject to change at any time without notice. Closing times are in business days and commence upon receipt of appraisal payment and satisfaction of borrower conditions. Jaken Finance Group only finances non-owner occupied investment properties.
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Jaken Finance Group, 2300 Barrington Road, Suite 400, Hoffman Estates, IL 60196