Are you supposed to have to pay to submit a mortgage application?

Question

I found a mortgage company online that says they can help people with low credit scores and low down payments to buy a house, they sent me an application but the thing is it says i have to pay $69 to submit the application, is this a normal practice? am i just out this money if they end up not being able to approve me for the home loan? i just wanna make sure this isnt some kind of scam, it seems like a reputable company but im not sure, any thoughts?

Answer 1

I work at a mortgage company and there is no charge to apply for a mortgage. But if you're dealing with a company that help finance people with low credit scores it is certainly a possibility that there is an application fee. There are cost associated with pulling credit reports and the bank will charge that to the customer. If you have bad credit it's a strong possibility you may be denied then the bank will lose that money, so in order to avoid a loss, they charge the fee to you. Most of the time it's non-refundable.

Answer 2

Upfront application fees are a thing of the past anymore. However, considering the circumstances here and your credit score is low and a $69 application fee is very reasonable this is not far fetched at all. Yes, you will most likely be out this money if they are not able to approve you for the home loan. I would recommend going to the better business bureau online and looking up information on this company, go to ripoffreport.com to see if anyone has anything bad to say about them and either use Google or Yahoo's search feature with the name of the company in "quotes" to see if you can dig up anything on the company to see if they are legit or not.

You can also contact a mortgage broker who specializes in low credit score home loan financing. Below are some links for you to help you with your search.

Answer 3

Application fees are very common with mortgage applications. I have seen them run from $100-300. I think that a $69 application fee is pretty good. But be careful with those subprime lenders. Make sure you research what you are getting your self into and know exactly what is going to work for you. Those type of companies are known for approving people for a house they really can't afford. Do your research on mortgage loans and the different types available.

Good luck!

Answer 4

Most mortgage brokers will charge to process an application, since they incur expenses in running credit checks, processing paperwork, and other items.

However, use caution when using an online source which works in such a fashion. They just might grab your $69, run a quick credit check, and tell you your FICO is too low to qualify for a loan.

You are far better off with a local mortgage lender who will probably do this basic investigation for free.

Answer 5

This is on a "per-lender" basis. Some lenders do charge, some don't.

Typically, if you close your loan with them, this charge is then credited back to your total fees on your final HUD and GFE. If you walk away, they pocket this to help cover their time in working on your application.

Some brokers/lenders require even more than this. I've seen charges up to $400 to cover the costs of appraisals.

This is not an unusual practice. Basically it is a way to tell if you are serious about seeking a mortgage. Most people won't want to pay anything if they are just "testing the waters". In this case, there should be a number to call or a FAQ on their website that should answer this question.

Answer 6

I am a mortgage broker in all 50 states in Ohio. We charge you no fee to apply.

We work with FHA.. look it up. Its a government loan where we can actually get you in the house at little cost to you and no down payment!! Bad credit works, because the government program is not credit score driven.

www.crefco.com check out our wesbite. We are also a member of the better business bureau. www.bbb.com Look us up.

I can give you a quote with 2 hours to let you know if you are pre-approved or not. Toll Free # 866-459-7201 - ask for extension 772 or Lindsey Bishop.

Good Luck! No matter what avenue you go DO NOT pay upfront to get pre-approved. There are many companies and banks out there that can help you at no cost to you.

The only funds you should expect to pay ONCE YOU find a home and win the bid is appraisal, and home inspection!

e-mail me with any further questions!

GOOD LUCK!

Answer 7

absolutely not. Also watch for high rates, extra fees, etc. Try countrywide or lending tree. Never pay to submit an application. There are so many companies out there that want to take advantage of you just bc you have messed up in the past. Don't let them. Good Luck!!

Once you have been pre-approved, some fees to process may need to be paid, but no upfront fees.

Answer 8

I suggest calling a local mortgage broker. If they are good they wont charge you a penny. It cost them a credit report and their time. They are more then happy to fork out the 13 bucks for a credit report.

I know some brokers that charge 495 upfront. Seriously I wouldnt go with any company that charges you upfront.

Answer 9

If your credit score stands good without needing hers, then apply by yourself but including her on title. Ask you mortgage company to send you in writing a side-by-side loan comparison of all your options detailing required downpayment, interest rate, terms, etc....! This option includes price for a loan with just you, another with both of you, and whatever else other type loan he thinks you can qualify for! As I will continue to say... Let them find you a program to fit in, instead of trying to get you to fit in a program!!!!

Answer 10

If you are thinking about buying a home and are worried about $69. Then you should not buy the home and get a bicycle. Come on, what do you think this is? It is going to cost you thousands to finalize a home purchase. If you are worried about the $69, stay with your parents.