Purchasing a home is a huge investment, but does that mean it should come with fees? Unfortunately, Borrowers can often be charged unnecessary fees. There are many lenders out there that will charge borrowers upfront application fees. Here’s why you should wait before paying them.
As you know, many lenders may charge upfront application fees when you are attempting to get a pre-qualification. These lenders tell the borrower that these fees will be applied as a credit towards the appraisal, and these fees can range from $500-$600. As many are unaware, it’s illegal for a mortgage lender to require payment upfront.
These lenders ease the sting by saying the fee will be applied to the appraisal when the fee is to hook the borrower in, hoping they do not shop around. The good news is if the appraisal is not ordered or completed and the borrower decides not to move forward, by law, the lender must refund that money. Eventually, if an appraisal is required, the borrower will pay for it; however, this is later in the process when the borrower requests the appraisal to be ordered.
We are always forthright with our borrowers at Indigo Mortgage and never charge unnecessary fees. Our goal is to find the best options possible for each unique situation. Reach out to the Indigo team for more information!