mortgages and credit checks

I wouldn't pay for the appraisal before you are sure that you are using that martgage company. All of the brokers that I have used (I just closed on a house last week) have always just had me pay for everything at closing. I have heard of some requiring payment for "application fees" or "credit report fees" outside of closing, so it is not a scam, per se, but I wouldn't pay for that stuff until you are sure that you are using that broker/lender.

I am a mortgage originator in Colorado and I understand your concerns.

One option would be to offer a credit card for the credit pull and to "pay at the door" for the appraisal.

From a mortgage company perspective, we pay thousands of dollars a month on credit inquiries. We write this off as an advertising expense, but it is definately a drain on our ocmpany's resources. Some smaller (or maybe smarter) companies try to collect the fee upfront. For example, if I pull your credit because you think you can qualify, but your score is well below what can be used to qualify, then I am out the cost of the credit inquiry (about $20). Would you be willing to pay for a credit report that indicated you could not qualify for a home? Maybe you would have that integrity, but most people simply walk away.

While paying for an appraisal via closing costs makes sense, it is not always practical. Some lenders will not accept the file for underwriting until the appraisal is complete. Sometimes there are problems getting the value that the listing agent thinks the house is worth. There are several major issues that can be uncovered during the appraisal process that can kill the deal. If I were working on your loan, and the appraisal uncovered an issue that you could not reconcile (or the value was $40,000 below purchase price), then I would be forced to pay the appraiser.

Contractually speaking, the lender is required to pay the full price of the appraisal - even if the sale did not complete - unless the buyer pays the bill.

To help the consumer, many appraisers will give you a discount if you pay when the appraiser shows up at your door. Instead of paying $350 at closing, the appraiser will accept $325 at the door.

The first time a lender is forced to pay for an appraisal, they will learn to be very conservative about ordering an appraisal. Even though I run a very effecient shop, we have paid for more than 10 appraisals this year alone.

Also, just to be thurough, the pre-approval process is not the conclusion of the process, it is only preliminary. Until you have a "clear-to-close" commitment, then there are just too many factors to guaranty a closing - especially if the undrewriting process is manual.

Sorry to be legnthy. Please let me know if you have any questions.