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Profile picture for bagram60

Pre Approval letter

In order to receive this letter, I must fill out an application, which asks for a expensive, non-refundable payment- Application fee. Is it really necessary to pay this fee, even in the scenario that I later decide the loan terms are not to my liking, wishing to turn to another bank?
It does not seem to make sense, seeing as how any reasonable person would want to compare offers first. No one would be willing to pay a 400 dollar fee for each and every single application.
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April 04 2013 - Chicago
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Profile picture for Go Huskers
Find a different lender, Quicken is not the only lender in Chicago.
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April 04 2013
This may be standard procedure with the lender that you are talking to but not industry standard.  There are lot's of complaints on this forum from consumers that have paid an upfront fee (which is really not allowed), and regreting service they are not receiving after their credit card has been charged.
Most lenders will issue a pre approval letter without fee(s), and their incentive is doing your loan. My advice is not to pay until you have decided to use lenders service. If they decline without an upfront fee find another lender.
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April 04 2013

I would never recommend giving a penny over to a loan officer until after you have an accepted and fully executed agreement of sale with the seller.  Once this happens and you are past the inspections period.  At that point it is then reasonable to provide your lender with a check so that he can order your appraisal and proceed forward toward closing. 

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April 04 2013
You should never give a Loan Officer/Bank Non-Refundable deposits. I personally dont reccommend even giving money for an appraisal deposit. You can pay for the appraisal directly to the appraisal service company when services are provided, not before. There is never a need for funds to change hands with your lender. It is just a tactic to make it harder to walk away if things dont go as planned.
All The Best
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April 04 2013
Profile picture for mamtazchowdhury
Wonderful Reply from Everrybody. I am first time Buyer too, we have to Pay Closing cost too & again so many. . I just got from Reply from few Realtor ,my question was, Realtor got 6% of the Sale . Why don't Share Closing Cost? One Reply was, if you aren't ready to pay Closing cost,don't Buy now. Another Reply, related with Cashier & Dentist, why don't ask to them to pay when go to them? This is Unvaluable Reply.
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April 04 2013
There should be no reason why you would need to pay for a Pre-Approval. You do need to provide information sufficient to allow the lender to run your credit report and understand your income and assets. Some may ask you to provide paycheck stubs, tax returns, and bank statements, but none should ask you for a non-refundable fee up front. Not until you have a signed purchase contract.
Charging a fee is just a way for the big lenders to sort through those borrowers that they "care" to spend time on. I am located in the Chicago area. Please feel free to contact me if you have any questions.
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April 04 2013

you should say who this lender is so everybody knows to stay away from them!

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April 04 2013
This is not standard procedure with many of the lenders I work with. Most lenders will issue a pre approval letter without fees and understand this is just a condition of doing business.  That would be like me charging admission at my open houses.  I would contact other lenders until you find one you are comfortable with who doesn't charge an upfront fee to give you a pre-approval letter.

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April 04 2013
You should not be paying anything to get a pre approval letter. I would look into a different lender
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April 04 2013
Use a different lender. I have one that does it for free.
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April 05 2013
I have never had a client who paid a fee for a preapproval letter.
Ask your Realtor for their suggestion.
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April 05 2013
No, find a lender that offers this service for free.
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April 05 2013
Run from the Lender quickly!

Can you let us know who that Lender is?
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April 05 2013
user2089291:  As you found out, some Lenders do want payment for this upfront.  Others do not.  I can only speak for myself and my company.  I would not need an application fee to provide the service you are asking for.  Should you want further information ... or if I can be of assistance, please contact me at your convenience.  I'll be happy to provide the information and guidance you need now and throughout your mortgage financing.
Best of luck to you ...
Gene

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April 09 2013
I would speak to a lender and ask them about this. Some charge this fee some dont. You may be able to work it out with them to cover the fee for you if you work with them. 
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April 09 2013
You should find another lender! Any lender should be able to prove there value to you prior to expecting any sort of payment. As most replies noted this is not the industry standard!
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April 09 2013
In a market like Chicago you'll find a good selection of mortgage brokers with low to no fees to get started. Shop around.
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April 09 2013
Profile picture for AndreaSmolin
Hope you have found your dream house by now.

For others users that have found this thread useful, I'd like to point out that Zillow now has a great pre-approval product: http://www.zillow.com/pre-approval/

Why should you get pre-approved on Zillow?

•  The process to calculate your pre-approval is easy and fast.

•  Zillow will connect you with highly-rated and reviewed lenders that offer great rates.

•  You will obtain a sharable pre-approval letter within minutes that you can print or email.

Calculate your pre-approval and get connected with a trusted lender today.



How do you get pre-approved?

To get a pre-approval letter, a lender will ask you for your Social Security number and permission to pull your required credit report for you and your co-borrower (if you have one). Most lenders charge an upfront fee of around $30 for this. However, by using Zillow's pre-approval tool, your credit pull is free. Rest assured that Zillow uses state-of- the-art technology to protect your personal information and only shares it with the lender you select. 

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January 14
Are you looking for a pre-qualification letter or do you want an underwriter to review your applicaton.  I woudl say most will provide a pre-qualification for free....few will submit a loan to an underwriter for review and approval without some upfront fee.
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January 14
" Rest assured that Zillow uses state-of- the-art technology to protect your personal information ..."
-----------
Yeah, so does Target!
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January 14
Find a different lender. Most lenders do not charge large fees for a pre-approval letter.
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January 14
uh.... you guys do know the difference between HTTP:// and HTTPS://    right?
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January 20
"uh.... you guys do know the difference between HTTP:// and HTTPS://    right?"
------
I was going to mention that but I've been trying not to stir the pot too much. You would think ANY mortgage broker, lender or any site asking for information necessary for a pre-approval would use a secure site. 

I hope consumers know to immediately click off of a site that asks them for any personal information if the URL isn't https and doesn't display the padlock in the browser window with a verifiable certificate. 
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January 20
In my 23 year career as a Realtor, I have never had a client use a lender that charges an application fee.  I would recommend that you stay away from any lender wanting to charge an up-front fee.  However, pre-approval letters in general are very important to have.  As a buyer, you want to show the seller of any home you make an offer on, that you are a strong buyer!  Having a pre-approval letter will help ensure the seller that you are serious and ready to move forward.  A pre approval letter demonstrates that you have "purchasing power" over those buyers who do not have any approval at all.  Take your time and interview lenders until you find one that you feel comfortable with!  Good Luck!   
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January 20
 
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