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Why do most lenders charge up-front fees just to apply for a mortgage?

April 26, 2017charge fees lenders mortgage up-front

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Why do most lenders charge up-front fees just to apply for a mortgage?

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Many lenders will charge $300 to $500 up front, when you apply for a mortgage. First so they earn additional money, but so that you will be less inclined to consider other lenders once you have applied – even if you later become dissatisfied with their rates, fees, or service.

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Some lenders will charge you an up-front fee of $300 to $500 to apply, usually an application or appraisal fee. Every reputable lender will charge you a fee to lock in a rate and order an appraisal. If they don’t, you’re not locked in. Some lenders say they don’t chare an application fee, but then you find out they charge a lock fee. To eliminate this confusion Xcapital has a simple policy that is we require a credit card number as a security for fees incurred if you back out of the loan. This fee is $500 and only is charged if you back out of the loan. The fee is not charged if the loan is denied.