Can a mortgage lender accept payment for an appraisal?

Answer 1

I don't know what state you live in, but in most states it's illegal. Ask your lawyer or real estate agent; sounds like a scam to me.

Answer 2

Yes this is allowed. What is happening here is that mortgage company is taking the payment from you to insure payment for the appraisal. That way the loan officer is not taking the hit, in the event that the loan fails to close.

What you will want to watch out for???!!!! THIS IS VERY IMPORTANT!!! Make sure that before your home is appraised, that you get an approval letter from the lender stating that you have been approved for the loan in question.

This type of tactic is a way for the mortgage company to lock you into doing business with them. Once you have paid for that appraisal, do you really want to go to another lender and pay for another???? I didn't think so. Furthermore, appraisers are not allowed to release the appraisal to you when the mortgage company has ordered it. Now don't get me wrong, the mortgage company HAS to order the appraisal, but if your loan goes belly-up, so to speak, then you will be stuck paying for that appraisal.

It sounds like you are having a trust issue with your current mortgage company. I may also be able to help you out with that. If you would like more information on this, or you have other questions, please feel free to contact me anytime at timothy.kazee@americanhm .com and we can talk.

Good Luck!

Answer 3

Typically, the lender gathers this "third party," fee. It is NOT illegal, and would show up on your Good Faith Estimate, and later on your HUD (Settlement statment) as Paid Outside of Closing (POC).

As the appraisal is a costly venture, this fee is collected before the inspection to insure payment of the charge. You will not typically get it back unless an arrangement has been made or the appraisal was not done. Due to the high incidence of fraud, consumer's are not allowed by lenders to choose their own appraisers, and at this point, even loan officers are not allowed to choose the appraiser! A third party is called in to do the property valuation.

Answer 4

different mortgage solutions exists, I have outlined some below

(I would also suggest you read : http://umgarticles.atspace.com/mortgage.htm

Pension Plan
Using a pension plan to accumulate the balance of your mortgage is a tax free saving scheme. The balance of your house will be saved over a period of time until you can pay your final balance. If you do intend to use a pension fund to save for the balance of your house, consideration should be taken into account to open another pension fund for retirement purposes too.

ISA Plan
With an ISA plan you invest in stocks and shares via an Individual Savings Account (ISA) - which is a tax-free method of saving. This method of saving may not be suitable for most borrowers. Before considering this option you should consult with an independent financial adviser.
Endowment
An endowment is still the most common type of interest only mortgage which also provides life assurance cover and a fixed payment for investment. The endowment policy along with the interest only mortgage should in effect end at the same time, leaving you with the ownership of your home and nothing to pay. Endowments have undergone much criticism; this is due to investors being promised high returns from their investments. However lately this has not been the case, borrowers have found their investments have been as good as expected and a shortfall in the end amount of invested cash will not match the amount owed on the current property.
Taking into account the recent problems that have arisen regarding endowment policies it is worth remembering that returns on endowment policies have been pretty good, however you do need to see the term out in full. Also endowments do provide life assurance as part of the actual policy, so in the unfortunate event of a death the mortgage balance is paid in full.
Advantages of an interest only mortgage
• Your investments and savings could accumulate more than the required amount to cover the final payment; this could leave you more cash for your own personal use.
• Some plans have good tax benefits and help reach the required amount it a quicker and cheaper rate.
Disadvantages of an interest only mortgage
• In the unfortunate event of your investments not acquiring the designated amount of cash to cover the loan repayment, the investor could face a shortfall which they will then need to pay. If you are worried about a shortfall on your investment, you should keep in touch with your investor and request regular updates on the situation of your endowment. If the worst comes to the worst, you can increase payments to compensate for the loss of investment.
• Cashing in your endowment, ISA or pension could have adverse effects on the amount of money you have saved over the past however many years. If you do decide to cash in any existing policies you may be subjected to a penalty, this could be a cash amount specified by the investment company/lender. Please seek professional advice if you are worried about the end results of your finances, don’t be too hasty as most policies accumulate more of the cash in the final year

for a complete informational package I suggest you visit one of the many mortgage informational sites the best free one in my opinion is :

also read http://umgarticles.atspace.com/mortgage.htm