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PRE-APPROVAL/APPLICATION COST

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Anonymous
Not applicable

PRE-APPROVAL/APPLICATION COST

So i did a quick application for an FHA loan. The loan officer sent me paperwork stating that in order to get my pre-approval letter I have to give him some documentation as well an $385 application fee for appraisal and credit. Does this seem correct? Why would I have to pay for an appraisal before I even purchased a house??? Isn't this usually part of the closing cost?
Message 1 of 10
9 REPLIES 9
Anonymous
Not applicable

Re: PRE-APPROVAL/APPLICATION COST

I went through Quicken loans and they had me give them 350.00 in order to move forward. I think its almost good will money. I did close the loan with the seller paying 3% of closing cost and anything not used the seller would get. So Quicken refunded my 350.00 to me and added the appraisals to the closing which was nice. Although I will pay for it in the long run, it was nice to have that 350.00 extra after closing on my first home.
Message 2 of 10
cliccmade
Contributor

Re: PRE-APPROVAL/APPLICATION COST

very suspect.
CH 7 filed 2/24/14 TU 572
Discharged date: 6/06/14
$500 Secured USBank Platinum
$700 First Premier Bank
$2000 Merrick Bank
$1300 Fingerhut
Goal 620 by 12/1/2020
Message 3 of 10
Anonymous
Not applicable

Re: PRE-APPROVAL/APPLICATION COST

The pre-approval should be free. However, in the moment you actually apply for the loan (after you have the signed contract) the lender may charge an "application" fee.
Message 4 of 10
DallasLoanGuy
Super Contributor

Re: PRE-APPROVAL/APPLICATION COST

This is a sales tactic. 1. To weed out those who know their FICO scores are in the 400s 2. Make you feel committed to them and not shop their rate. Do you want to work with an online salesman or a Prof. Mortgage Consultant? Pre-Approval should be free!!
Retired Lender
Message 5 of 10
JeffWeico
Valued Member

Re: PRE-APPROVAL/APPLICATION COST

I am in a similar situation. Went with Wells Fargo. They pulled my credit reports (scores were TU: 686, Equifax: 700, Experian: 648) I have a short credit history as I have paid cash for everything over the last 10 years or so (when I was young, I took on more credit than I could handle, and got into trouble, so I have a distaste for debt, particularly credit card debt).
 
I have 9 months of good credit on 4 credit cards, 2 secured, and 2 unsecured. I carry low balances on all of them. I have a $70 medical collection account and a $50 medical collection account ONLY on Experian).
 
The Wells Fargo rep told me this was not a problem, but that I had to document other sources of credit. So, I gave them the history from my cable TV, electric bill and phone bill. All were open for more than 24 months with no late payments.
 
I was told that a $350 fee would expedite this, and was refundable in the event I was not approved, and if I WAS spproved, then the $350 would be applied to the appraisal. This sounded OK to me.
 
The thing is, I have not heard from my rep for 3 weeks. I have left a couple of messages, but have not received a call back.
 
Of course, right now, the credit markets seem to have totally siezed up.
 
Has anyone experienced anything similar?
 
A $350 loss will not kill me, but I was hoping to be able to buy a house - to take advantage of the $7,500 tax credit, and moderate prices. BTW this was for an FHA loan, although I have at least a 10% downpayment, and probably closer to 15%.
 
Any information appreciated!
 
Thanks,
 
Jeff
 
 
Message 6 of 10
DallasLoanGuy
Super Contributor

Re: PRE-APPROVAL/APPLICATION COST



JeffWeico wrote:
I am in a similar situation. Went with Wells Fargo. They pulled my credit reports (scores were TU: 686, Equifax: 700, Experian: 648) I have a short credit history as I have paid cash for everything over the last 10 years or so (when I was young, I took on more credit than I could handle, and got into trouble, so I have a distaste for debt, particularly credit card debt).
 
I have 9 months of good credit on 4 credit cards, 2 secured, and 2 unsecured. I carry low balances on all of them. I have a $70 medical collection account and a $50 medical collection account ONLY on Experian).
 
The Wells Fargo rep told me this was not a problem, but that I had to document other sources of credit. So, I gave them the history from my cable TV, electric bill and phone bill. All were open for more than 24 months with no late payments.
 
I was told that a $350 fee would expedite this, and was refundable in the event I was not approved, and if I WAS spproved, then the $350 would be applied to the appraisal. This sounded OK to me.
 
The thing is, I have not heard from my rep for 3 weeks. I have left a couple of messages, but have not received a call back.
 
Of course, right now, the credit markets seem to have totally siezed up.
 
Has anyone experienced anything similar?
 
A $350 loss will not kill me, but I was hoping to be able to buy a house - to take advantage of the $7,500 tax credit, and moderate prices. BTW this was for an FHA loan, although I have at least a 10% downpayment, and probably closer to 15%.
 
Any information appreciated!
 
Thanks,
 
Jeff
 
 



1. loans are still getting approved.
2. $350 or some other stupid number doesn't improve your chances for approval.
3. run away from the upfront fee..........!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
 
Retired Lender
Message 7 of 10
Anonymous
Not applicable

Re: PRE-APPROVAL/APPLICATION COST

3 weeks wow. I was really uncomfortable with paying the 350.00 upfront, but I also liked the idea of working with a large online company. I find all the local mortgage brokers in my area had more on their plate than they could handle. Also it was my understanding that Quicken could get the fastest FHA approval. Everyone situation is differant, but I started the process at the end of May and closed at the end of July. 350.00 upfront fee, comunicated entirely through email, 3% down, 6% FHA, 70k income, 580 mid score. There were a couple of bumps in the road, but nothing major. Best of luck to you
Message 8 of 10
Anonymous
Not applicable

Re: PRE-APPROVAL/APPLICATION COST

The only thing I have paid for so far was the appraisal and (my choice) the inspection and hurricane mitigation. Also, I deposited $2500 in earnest money. Lisa
Message 9 of 10
BrianB_The_Loan_Professor
Valued Contributor

Re: PRE-APPROVAL/APPLICATION COST

They charge this comittment fee to lock you in. I disagree with this like others. If I cant earn your business through my service and knowledge I am not going to play games to keep you.
I have the appraisal paid at the door but do not collect the money up front and pay it for you.
 
Good Luck
Wells Fargo is wierd i know from having used them myself
You get bounced around and rarely ever speak to the same person
I didn't like it at all
 
B
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Brian B The Loan Professor
Mortgage Banker - offering FHA, VA, USDA , and Conventional mortgages in all 50 states -

If I do not respond to a follow up question please feel free to contact me directly
Message 10 of 10
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