Cherry Hill, NJ Home Buyers being asked to pay upfront lender fees???

Recently I have been hearing a disturbing trend of First Time Home Buyers in Cherry Hill, NJ being asked to pay upfront lender fees such as an application fee. This is not a requirement and simply should not be paid. I would actually question what type of mortgage lender or broker you are speaking with if this is even brought up. The Home Buyer Resource Center is here to help guide local home buyers through the process. You can use us as a forum to ask questions to tricky real estate and mortgage questions as well. Buying a home is a big under taking and you deserve for the process to go as smoothly as possible. We find that educating and setting the proper expectation makes the home buying process be less stressful.

In our local market including the town of Cherry Hill, NJ it is crucial to know what fee’s you can be asked to pay upfront. Once you are pre-approved and you find a home that you want to put an offer in on, your real estate agent will ask you to put down a deposit to buy the home. That deposit is then credited back to you at your loan settlement. The only fee that the lender should even bring up to you about paying upfront is your appraisal. The appraisal is completed by a third party appraiser and is not a lender fee. Lenders will request you pay this upfront because if something goes wrong with the appraisal, such as improvements need to be made, or the value doesn’t support the agreed upon sales price, the lender will forced to pay the appraiser for his work. Lenders are not generally going to risk paying for an appraisal for a loan that may not close. It is actually worth the risk as a home buyer though, because the appraiser will make sure that you are not over paying for the property. This way you can count on not being under water prior to ever actually living in the home.

The only other instances that a home buyer could be forced to pay anything else upfront is if they are in need of some sort of credit enhancement to help them qualify for the loan that they are applying for and also a home inspection. Neither of these fees are “lender” fees though. Your lender gets paid when your loan closes. That is their incentive. If a lender is asking you to pay an upfront lender fee be sure to question the company that you are dealing with. Lenders are attempting to earn your business and there are great ones out there that will get your loan to closing without headaches. Again, their incentive is to help you get your loan to closing, not collecting any upfront fees for protection against your loan not closing.



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