West Virginia Mortgage Law Practice Test

An application fee:

1. Cannot be charged

2. May be charged only if closing occurs

3. May not exceed 3% of the loan amount

4. May not be charged if the loan is denied

The correct answer is: Cannot be charged

An application fee refers to a charge or fee that is required to be paid as part of the application process for a loan or other type of financial service. While some fees may be charged for specific services, such as appraisal or credit report fees, an application fee is a general fee that is charged for simply submitting an application. Option A is the correct answer because an application fee may not be charged at all. The other options are incorrect because - Option B is incorrect because an application fee can still be charged even if the loan ultimately does not close. - Option C is incorrect because there is no limit to how much an application fee can be, it can vary depending on the lender and the type of loan. - Option D is incorrect because an application fee can still be charged even if the loan is ultimately denied.