Home Buying in 78059>Question Details

Jessica, Home Buyer in 78059

My lender is asking for a $450 upfront fee to be paid inorder to process my loan application. Is this normal?

Asked by Jessica, 78059 Thu Jul 21, 2011

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14
Yes they can ask that you pay for the appraisal upfront as they will have to pay for it if for some reason the deal doesn't go through. The appraiser still needs to be paid as he has provided a service regardless of outcome. Talk candidly with your lender and ask what fees he is charging and why. If you are not pleased with his answers, shop around. There are plenty of lenders who would love your business if you have great credit.
1 vote Thank Flag Link Thu Jul 21, 2011
Yes, it is normal. They will pay for the appraisal with it most likely although appraisals here cost less than that. Ask what the money is for.
1 vote Thank Flag Link Thu Jul 21, 2011
Johnny below may be getting stuck in semantics.
Processing application?
Processing for pre-approval?
or
Processing the loan for approval?

There are unnecessary fees charged up front by some lenders.... not the good ones though. Some lenders like the texas lending people charge an up front 'commitment fee' to do your loan. LOL..... I don't know how they get away with it.

I don't see many charge to pre-approve your loan though.

Regardless..... the up front fees are not necessary and there are MANY lenders who do not charge them. It just isn't professional and there is no advantage to you to work with a lender who charges this junk fee.

Now, if you are pre-approved and proceeding with the loan.... Do expect to pay for your appraisal up front..... No lender wants to risk you backing out of the deal without that being paid.
0 votes Thank Flag Link Sun Aug 4, 2013
Most of the 'Agents' assumed the fee was for appraisal. After 9 years in the mortgage business I can tell you that the appraisal does not come in before the loan application. After you take the loan application, run the credit, and run a property profile, you go over the info with the client and they determine what loan program fits. I never asked a client to pay any up front fees.
0 votes Thank Flag Link Sun Aug 4, 2013
No that is not normal operating procedure.
0 votes Thank Flag Link Fri Aug 2, 2013
Not here in Arizona it is not. By upfront, you mean just having a conversation and seeing about getting pre-approved? No, not "normal" here by any means. Normally it is a free conversation to have as a good local lender will get you pre-approved and if you can't get a loan now, walk you through the steps to increase & improve your scoress and credit. While you work on it, you can start saving for your downpayment.

I suggest finding another lender. If you shop around, please make sure to compare apples to apples. I have seen clients "compare" and think they are getting a better deal when they were not because they were not comparing everything. Best of luck.
Spirit
0 votes Thank Flag Link Thu Jul 21, 2011
With many mortgage brokers do charge for these services.

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Thu Jul 21, 2011
If this covers the appraisal, then it is very normal.
If they are asking for this in addition to the appraisal fee, then it is NOT NORMAL.

Are you under contract? Or just getting a pre-approval?


Tom Burris
Mortgage Banker
DallasLoanGuy.com
(214) 763-4629 cell/text/nights/weekends(Really!!)
tomburris@dallasloanguy.com
Lending all across the entire Great State of Texas!!
0 votes Thank Flag Link Thu Jul 21, 2011
This is likely the appraisal fee.
This is to keep you from shopping around.

Ask them if they will help without the fee upfront.

Plenty will.
0 votes Thank Flag Link Thu Jul 21, 2011
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
It's not normal. While some banks do charge this type of upfront fee. As a broker I have my clients pay for appraisals but they can only be paid for after the client has been disclosed. This fee ranges from $$300 to $470 depending on the lender I use.

I would get a GFE from another lender or broker. If you are dealing with a retail bank a broker like myself can get you the same interest rate they are charging you and also give you about a $3000 credit towards your closing costs. This is based on a $200,000 loan amount but it shows you how much you can save using a broker. Brokers can charge more or the same as retail companies so you do want to compare some options. Once you know your credit scores you can get GFE's from other lenders without them needing to pull your credit.

If you like call or send me an email and I will send you a GFE. I am a tier one broker all the major lenders like Wells Fargo and my rates and fees will save you thousands over the retail banks.

Best of luck to you.

Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o.512.669.5599 m.512.633.4157
listings@dongroff.com
0 votes Thank Flag Link Thu Jul 21, 2011
Do you already have an ACCEPTED OFFER and need a loan? Then that $450 sounds like it's for the cost of the appraisal which most lenders will ask you to pay. This is part for the loan approval process to make sure the house is worth what you're paying for it and that it is not a risky investment on the bank's part to give you the loan.

But if you are at the preapproval process wherein you want to have a preapproval letter to go with an offer you are making, then no....it's not typical to pay $450 to be preapproved .
0 votes Thank Flag Link Thu Jul 21, 2011
Jessica

I disagree, that is not normal. I assume you may be using a large bank as some of them require up front fees regardless if they approve you or not. In my business we never charge an upfront fee. Borrowers do have to pay for the appraisal but that is not done before the loan process starts. I would ask them what that fee is for before you pay it. Hope this helps.
0 votes Thank Flag Link Thu Jul 21, 2011
Thank you both for taking the time and answering my question. Just spoke to my lender and she said exactually what the both of you stated... just needed piece of mind. Thanks again.
0 votes Thank Flag Link Thu Jul 21, 2011
As Tim said, this is likely for the appraisal since these days they have to almost always be paid up-front and non-refundable so make sure this is the house for you. I usually recommend the appraisal be paid after the property inspection report has come back clear.
0 votes Thank Flag Link Thu Jul 21, 2011
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