What Does the Application Fee Mean?
During the loan application process, you will come to realise that there are a variety of expenses and fees that are associated and required to be paid. You may want to learn more about what the application fee means in regards to loan applications.
A home loan application fee is a one-time fee that is charged by the lender when a borrower applies for a mortgage. This fee is typically charged upfront and is usually non-refundable, regardless of whether the loan is approved or not. The amount of the fee can vary depending on the lender and the type of loan being applied for, but it typically ranges from $600 to $995.
The fee covers the costs associated with processing the loan application, such as:
- Credit check: The lender will pull the borrower’s credit report and credit score to determine their creditworthiness. The fee covers the cost of this credit check.
- Appraisal: The lender will require an appraisal of the property to determine its value. The fee covers the cost of the valuation.
- Processing and underwriting: The lender’s staff will review the loan application and supporting documents, such as income and employment verification, to determine whether the borrower meets the lender’s guidelines for the loan. The fee covers the cost of this processing and underwriting.
- Other administrative costs: The fee may also cover other costs associated with processing the loan application, such as document preparation, mailing, and filing fees.
Can The Mortgage Application Fee Be Waived?
Mortgage application fees have the potential of being waived if you are qualify, however, this varies depending on the situation.
You can negotiate the mortgage application fee being waived with your existing mortgage lender early in the process.
Potential borrowers who are concerned with the various fees and expenses involved with loan application processes have the option to apply for a no-fee home loan or inquire with their home loan lender about combining the application fees and expenses with their mortgage repayments. A no-fee home loan is a type of home loan agreement where the one-time fees have been waived.