When can a lender charge an appraisal fee following a Loan Estimate?

The correct timing for a lender to charge an appraisal fee is after the borrower indicates they wish to proceed with the loan application. This is significant because the lender cannot collect fees for services not yet performed prior to the borrower expressing intent to move forward. The Loan Estimate provides essential details about the loan terms, fees, and estimated closing costs. However, the key point is that an appraisal is typically ordered and the fee can be collected only when the borrower has given clear intent to proceed with the application. This policy helps protect borrowers from being charged fees before they have committed to the loan process, ensuring that charges are relevant to the ongoing transaction.

While other options may suggest alternative timings for charging appraisal fees, they do not acknowledge the requirement for borrower intent, which is legally mandated to prevent lenders from imposing costs prematurely. For example, merely submitting a loan application may not indicate a full commitment, and sending the Loan Estimate does not imply acceptance to proceed on the part of the borrower.