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Lender tells me he will pay for the appraisal fee ($630!)

I'm not sure I trust my lender.  Early on, I asked him if he would waive my appraisal fee as I refinanced a few years ago and didnt' feel I needed to do it again.

He said maybe and told me that it would probably be between $400-$450 (sounds right).  When I got 1 page of the GFE, the cost was $630 which was a big surprise and I called him on it.  I told him I was not going to pay that to appraise my house again so he said they would pay for it.  Great!  Then, he said that I'd probably have to pay it up front but it would be taken care of at closing.  Huh?  How do I know that or trust that is going to be the case?

We've had a few miscommunications (IMO).  It seems he doesn't get what I'm asking him sometimes so I have to repeat it.   Anyway, how can I be sure they actually DO pay the appraisal costs.
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January 11 2013 - Potrero Hill
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Profile picture for wetdawgs
An appraisal is valid for maximum two or three months.    Therefore "a few years ago" is not an appraisal your lender can use if an appraisal is required.

Get his commitment in writing.



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January 11 2013
There is going to be another appraisal, so there is going to be another appraisal fee, someone is going to pay it.

A.) Why is it $630? It is an investment property? Is the property worth $1.5 million? If not something like that there is no reason for it to be so high. $450-500 sounds more like it.

B.) Having the borrower pay the appraisal fee up front and then crediting it back at closing is common. I know in most cases I, as the loan officer, would not pay for the appraisal up front. The borrower could then decide to cancel the transaction at any time, for whatever reason they might have, and I would still personally be on the hook for it (assuming the appraisal is already done).

If you don't trust your loan officer you should find someone else. But crediting the appraisal back at closing is common practice. I would just make sure it is in writing and reflected on the up front disclosures somewhere.

Sincerely,
Greg Cowart

Mortgage Advisor - 16 Years Experience
Partners Mortgage
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January 11 2013
"taken care at closing" likely means loan officer is expecting the HUD 1/Settlement Statement to show - appraisal - POC (paid outside of closing) which means you are paying for the appraisal.  The other two options are to have loan officer cover the appraisal by not giving check/credit card (which probably isn't going to happen) or pay for it upfront but have loan officer reduce their Origination Charge on the Good Faith Estimate  by amount of the appraisal.  If loan does not close you will have still paid for an appraisal.
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January 12 2013
Profile picture for zuser20140309095056799
My client has been asked to pay an appraisal fee of $450.00 but the lender wants it to made to him personally not the to the mortgage company says so he can pay for it with the company credit card. Out of all my years, I haven't heard of that protocol before..Is this something that they do now? It's a red flag for me..
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May 13
An appraisal is required on any new transaction, regardless of how recent the past appraisal was done..  He is asking you to pay the appraisal fee upfront, because if your loan does not go through, then he wont pay.. if he said he would pay via "lender credit' at closing.. this is normal.  And the current rules have changed regarding appraisal fees..  because the "Lender" is ordering the appraisal on your behalf, they are responsible for payment to the appraisal management company.. so it's not uncommon for you to make out a check or pay the lender, and in turn the lender pay the appraisal management company for the appraisal.  As far as the cost.. yes, $630 seems high.. but if you are financing a rental property or doing a jumbo loan, then that fee is reasonable.  I would have the lender put in writing his promise to reimburse you at close for the appraisal.  Feel free to reach out to me via my profile if you have any additional questions, William J. Acres
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May 13
"My client has been asked to pay an appraisal fee of $450.00 but the lender wants it to made to him personally not the to the mortgage company says so he can pay for it with the company credit card. Out of all my years, I haven't heard of that protocol before..Is this something that they do now? It's a red flag for me.."
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Yes, that would be a red flag and I would advise against that. Is this a mortgage broker? Thy should have very little to do with the appraisal ordering other than submitting the order, you should be paying the appraisal management company directly.


William, it helps to check dates and read the answers so you know what the current question is.
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May 13

zuser -

Another possibility is they are trying to get a head start on ordering the appraisal.   It sounds like the lender is a mortgage broker.   Current regulations do not allow a client to pay an appraisal fee until 3 days after they received LENDER loan disclosures.    A broker can pay it on their company account as early as they want.    My guess is the broker is trying to circumvent the guideline by collecting and holding payment from applicant before guidelines allow them to.

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May 13
 
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Related Discussions
Lender tells me he will pay for the appraisal fee ($630!)
Profile picture for Justin Sheftell
Latest reply by Justin Sheftell
May 13 | 7 answers
  • Posted by Trudijane
  • In Mortgage
  • January 11 2013
Mortgage Rates
 
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