DEFINITION of 'Loan Application Fee'

A fee charged to process an application for a loan, such as a home mortgage from a lender or mortgage broker. Loan application fees are charged to cover some of the costs involved in processing the application including credit checks, property appraisals and basic administrative costs.

BREAKING DOWN 'Loan Application Fee'

Loan application fees are pretty standard in the lending industry but should be carefully reviewed all the same. Not all loan applications will require you to pay a fee; for example, the lender may waive the fee in an attempt to secure your business. In general, the fee should only be a couple hundred dollars - higher fees should be viewed with some skepticism. Most application fees are nonrefundable, even if the lender decides to not offer credit to the individual applying for a loan.

RELATED TERMS
  1. Origination Fee

    An up-front fee charged by a lender for processing a new loan ...
  2. Garbage Fees

    Unnecessary fees tacked onto mortgage closing costs by lenders ...
  3. Utilization Fee

    An annual fee assessed by a lender against a borrower. The fee ...
  4. Junk Fees

    Nebulous charges assessed at the closing of a mortgage that go ...
  5. Exchange Fees

    A type of investment fee that some mutual funds charge to shareholders ...
  6. Mortgage Broker

    An intermediary who brings mortgage borrowers and mortgage lenders ...
Related Articles
  1. Personal Finance

    How Do Mortgage Lenders Get Paid and Make Money?

    When homebuyers educate themselves on how mortgage lenders get paid and make money, they are more likely to save thousands of dollars on their mortgages.
  2. Personal Finance

    Mortgage Fees That Can Trash Your Refinance Deal

    Before deciding that refinancing your mortgage at a lower interest rate is a good deal, factor all the fees into your calculations.
  3. Personal Finance

    Questions To Ask Your Mortgage Lender

    When buying a house, avoid nasty surprises by asking the right questions about your mortgage lender's qualifications and the mortgage process.
  4. Financial Advisor

    Tips To Improve Chances Of A Small Business Loan

    Enhance your small business loan eligibility by keeping these important tips in mind.
  5. Personal Finance

    Improve Your Chances of Being Approved for a Mortgage

    Homebuyers should think like lenders and fix their credit profiles before applying for a home loan.
  6. Retirement

    When Are Mortgage Lenders Better Than Banks?

    Individuals seeking a mortgage loan should consider factors or circumstances that may make a mortgage lender a better choice than a traditional bank.
  7. Investing

    8 Investing Fees That You Should Never Pay

    In investment management and financial planning there are a plethora of fees that are unnecessary.
  8. Personal Finance

    Advantages And Disadvantages of Using a Mortgage Broker

    Mortgage brokers may be able to find you the loan of your dreams, but you should consider the potential downsides before hiring one.
  9. Personal Finance

    7 Mortgage Trends To Expect In 2011

    How will the year compare to 2010? What's likely to be different?
RELATED FAQS
  1. When is an underwriting fee too high on a commercial loan?

    Learn about underwriting fees and when they're too high. If the underwriting fee exceeds 2% of the total loan size, the fee ... Read Answer >>
  2. Are good faith estimates (GFEs) accurate?

    Learn how federal guidelines regarding good faith estimates protect consumers under the revised 2010 version of the Real ... Read Answer >>
Trading Center