Start with the total-cost question
When you compare transactional funding, EMD funding, or other short-term deal capital, the advertised rate is only one part of the decision. Two lenders can advertise different rates and still produce a very different final cost once the full fee structure is applied.
1. Headline rate
What percentage is advertised, and what dollar amount does that percentage equal on your deal?
2. Minimum fee
A low percentage may not matter on a smaller transaction if the lender has a minimum charge.
3. Upfront money
Find out what has to leave your pocket before the transaction closes—and whether it is refundable.
4. Timing charges
Ask whether the price changes if a same-day double close becomes a two-day or multi-day transaction.
5. Title-company structure
Separate title companies can create extra coordination or fees with some funding programs.
6. Deal-size tiers
Pricing can change when a transaction crosses a funding limit. Ask for the tier that applies to your actual purchase amount.
Double-close example: 1% vs. 1.5%
A lender advertising 1% may look cheaper than a lender charging 1.5%. But that comparison is incomplete if the 1% program also has daily extension charges, upfront fees, minimums, or added costs for separate title companies.
Teaching moment: Calculate the actual dollar cost using your purchase amount, expected closing timeline, and title setup. Then compare apples to apples.
EMD funding: cost vs. capital tied up
EMD funding is a different comparison because you are not only comparing a fee—you are deciding whether to use outside capital or tie up your own money in escrow.
- How much is the non-refundable upfront fee?
- How long is the deposit being funded?
- What happens if the closing is delayed?
- Is there another fee if the funding period extends?
- What is due at closing?
- What would it cost you—in lost opportunities or liquidity—to use your own cash instead?
Teaching moment: EMD funding can be expensive compared with using your own cash, but the right comparison is the fee versus the value of keeping your cash available and protecting the deal.
Stack Method and short-term closing capital
For short-duration closing structures, compare more than the percentage. Ask about the minimum charge, maximum funding amount, upfront coordination fees, expected readiness time, and any exceptions that could change the price.
Seven questions to ask before choosing a funding source
- What is the total dollar cost on this exact deal?
- Is there any non-refundable money due before funding?
- Is there a minimum fee?
- Does the cost change if the deal takes longer than expected?
- Does using separate title companies change the price?
- Does pricing change above a certain deal size?
- What has to happen for the quoted price to remain valid?
Bottom line
A lower advertised rate is not automatically a better deal. The best funding option is the one whose total cost, timing, requirements, and transaction structure fit the deal you actually have.
Have a deal you want to compare?
Send us the purchase amount, closing structure, timing, title setup, and funding need. We’ll help you identify the questions worth asking before you commit.
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