Examine costs of applying for home mortgage

What kind of fees do banks and mortgage companies typically charge applicants? Most lenders charge fees to offset the costs they incur when processing the loan application. These expenses typically in- clude a credit report and property appraisal, along with covering the time a loan officer has to put into the process.

The credit report helps the lender determine the risk of the borrower and their history and ability to meet debt obligations. The property appraisal states much the property is worth. Once the lender knows that value, they will then figure out how much they can lend to the borrower.

How much these fees are and how they are collected varies widely by lender. Some lenders don’t charge an application fee; some may charge $50 and ask for it up front.

The appraisal fee is usually collected after the preapproval based on your credit and ap- plication. Appraisals can run anywhere from $200 to $400, and most banks require you to cover the cost.

Application fees are typically nonrefundable. Since I am paying for a credit report and property appraisal, can I use this information to apply with another lender?

Unfortunately, no. Since credit reports can change, lenders will want to order their own to ensure they’re authentic and have the most up-to-date information.

Because appraisals are opinions and can vary by the person who performed them, lenders also insist on working with their preferred appraisal companies. After all, it’s the lender’s money at stake in the transaction, and it needs to protect its interests by ensuring it has accurate information.