Can a Loan Originator charge me an application fee?  A Loan Originator (LO) can charge you an application fee only after you receive a Good Faith Estimate (GFE) and indicate that you want to proceed with the loan.  HUD's Regulation X provides that the only charge that a LO  may impose on a potential borrower before issuing a GFE, is a charge limited to the cost of a credit report.  Therefore, a LO may charge only the actual cost of a credit report (i.e. if the LO's cost for a credit report is $15.00, the LO may only charge the applicant $15.00). 

The LO cannot charge, as a condition for providing a GFE, any fee for an application, appraisal, inspection, administrative or other similar services.    Only after a loan applicant receives a GFE and indicates an intention to proceed with the loan covered by the GFE, may the LO collect fees beyond the cost of a credit report.

There are LOs that will attempt to collect fees from you prior to you receiving a GFE, because they know it's harder to switch lenders once you have paid out a lot of fees.  However, you should in no way pay any fee besides a credit report fee, until you have a GFE and agree for the LO to do the loan.   

HUD's Regulation X pertains only to residential mortgages.  Commercial mortgages are exempt from this rule.