Make sure you get a good faith estimate before you pay any money to the lender.  The $500 charge sounds like a fee for the appraisal and credit report/processing fee.  Some lenders charge that fee at application.  Shop around and you will find many lenders/brokers that don't  charge upfront fees.  Ask for a good faith estimate of closing costs.  This estimate will give you a breakdown of all the estimated costs involved.