One of the most common questions for prospective homebuyers is whether getting preapproved for a mortgage will cost them anything. The good news is that getting preapproved is generally inexpensive or even free in many cases, but costs can vary depending on the lender and their policies.

Here’s a breakdown of potential costs and what you should expect.

1. Credit Check Fee

• Cost: $0–$50

• Many lenders perform a hard credit inquiry as part of the preapproval process to evaluate your creditworthiness. While some lenders absorb this cost, others may charge a small fee to cover the expense of pulling your credit report.

2. Application Fee (Rare)

• Cost: $0–$500

• Some lenders charge an application fee during preapproval to offset administrative costs. This is uncommon for preapprovals but may occur with certain banks or smaller institutions.

3. Upfront Costs for Appraisal or Processing (Not Typically Required for Preapproval)

• These fees are generally associated with final loan approval, not preapproval. However, it’s good to confirm with your lender that no upfront costs are required at this stage.

4. No-Cost Preapprovals

• Many online lenders and mortgage brokers offer preapproval for free as part of their customer service. They use the preapproval process to build relationships with potential borrowers and guide them through the homebuying journey.

In most cases, preapproval doesn’t require upfront payment. Costs like appraisal fees, title insurance, and other closing expenses come later in the mortgage process, after you’ve made an offer on a home and the loan is moving toward final approval.

1. Choose Lenders That Offer Free Preapproval

Many reputable lenders provide free preapproval services. Be sure to ask upfront if any fees apply.

2. Shop Around

If a lender charges a fee for preapproval, compare it with others to ensure you’re getting a competitive deal.

3. Check Credit Yourself First

Consider pulling your own credit report before applying for preapproval. This can give you an idea of your credit standing without triggering a hard inquiry, which might temporarily lower your score.

Even if you have to pay a small fee for preapproval, it’s typically worth it because:

• It gives you clarity on how much you can borrow.

• It strengthens your offer in a competitive housing market.

• It identifies potential financial issues early in the process.

When discussing preapproval, ask your lender:

• Is there a fee for preapproval?

• Will there be a hard credit inquiry?

• Are there additional costs for the preapproval process?

• Are any of these costs refundable if I don’t proceed with the loan?

For most buyers, the cost of getting preapproved is minimal or even free, making it an accessible and essential step in the homebuying process. By clarifying potential fees with your lender ahead of time, you can avoid surprises and focus on preparing for your home purchase with confidence.

Remember, the benefits of preapproval far outweigh any small fees you might encounter, positioning you as a serious buyer ready to secure your dream home!