Fees prior to approval?

[Anonymous]

Is it normal for mortgage lenders to ask for appraisal and other fees prior to indicating whether or not the customer qualifies for the mortgage? The middle FICO mortgage score between my husband and me is 627. Most of the banks in my area are asking for a 640 minimum, so I decided to try to get an approval from an online lender. I first tried Rocket Mortgage from Quicken. Instead of the 8 minutes they say it should take, I spent 8 hours going back and forth by email with one of their employees, who seemed very interested in the amount of money I could come up with for closing, but she never once said whether or not we could even be approved with our scores. I thought that was odd. I then went to Guaranteed Rate, and they are asking for an appraisal to be done before they will submit the file for underwriting. Maybe it's just me, but I think having an appraisal done first would be a waste of time, money and effort if I can't actually get approved for a mortgage. 

[StartingOver10]

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@Anonymous wrote:

Is it normal for mortgage lenders to ask for appraisal and other fees prior to indicating whether or not the customer qualifies for the mortgage? The middle FICO mortgage score between my husband and me is 627. Most of the banks in my area are asking for a 640 minimum, so I decided to try to get an approval from an online lender. I first tried Rocket Mortgage from Quicken. Instead of the 8 minutes they say it should take, I spent 8 hours going back and forth by email with one of their employees, who seemed very interested in the amount of money I could come up with for closing, but she never once said whether or not we could even be approved with our scores. I thought that was odd. I then went to Guaranteed Rate, and they are asking for an appraisal to be done before they will submit the file for underwriting. Maybe it's just me, but I think having an appraisal done first would be a waste of time, money and effort if I can't actually get approved for a mortgage. 

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Talk to the LO at Guaranteed Rate. I have seen them submit files to the u/w first and get the appraisal after the u/w approves (subject to the appraisal). 

[MTSN]

I believe the only fees I've paid up front were the appraisal and credit check fee in the last 3 deals I've done. 

[DallasLoanGuy]

most lenders only ask for the appraisal upfront.... but that can be delayed until after underwriting by some lenders.

if you think you have an iffy file, work with a lender who can submit you to underwriting BEFORE you find a house or at least delay the appraisal until after you get seen by underwriting.

[Anonymous]

My situation is a little different, because we already live in the house. We're on a contract for deed, but the seller asked that we try to get a mortgage under our names at the 3-year mark, which comes up in July. That's why I'm confused as to why the Quicken people were so concerned with fees before they've even checked our reports and scores. 

[VALoanMaster]

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@Anonymous wrote:

My situation is a little different, because we already live in the house. We're on a contract for deed, but the seller asked that we try to get a mortgage under our names at the 3-year mark, which comes up in July. That's why I'm confused as to why the Quicken people were so concerned with fees before they've even checked our reports and scores. 

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That is Quicken's MO & here's why. Once you send them money you are psychologically & emotionally "invested" with them & way less likely to ever cancel with them regardless of how bad your experience is with them. One item of note: It is illegal for a lender to charge you upfront for anything more than a nominal credit report fee until they have sen t out the required disclosures & 3 days have elapsed.

I would steer clear of the large banks/companies & go with a mortgage banker.

[StartingOver10]

^^^Agree 100% with the above. Quicken has their own appraisal co too - so once you pay their fee, you won't get it back. Check the complaint websites and you will see a ton of complaints. OP, I thought you were using Guaranteed Rate?

[DallasLoanGuy]

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@VALoanMaster wrote:

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That is Quicken's MO & here's why. Once you send them money you are psychologically & emotionally "invested" with them & way less likely to ever cancel

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yep. it is a sales tactic

not in your best interest. find a lender who puts you first