Which of the following fees is commonly charged when applying for a home loan?

• A. Application fee
• B. Discharge fee
• C. Ongoing monthly service fee
• D. Lenders Mortgage Insurance (LMI)

Answer: (A)

When you apply for a home loan, the fee most lenders routinely charge up front is an application fee. This fee covers the costs of processing the loan application, including credit checks, verification of income and documents, and sometimes the initial property valuation. The discharge fee is charged when you pay off or release the mortgage, not during the application. An ongoing monthly service fee is a recurring charge and isn’t a standard part of every loan application. Lenders Mortgage Insurance (LMI) is tied to the loan’s risk based on your deposit size and is usually paid at settlement or rolled into the loan, not simply charged at the application stage. So the commonly charged fee during the application is the application fee.