Question

When may a borrower be charged any fee besides the credit reporting fee?

A) When they apply for a mortgage
B) When they request a copy of their credit report
C) When they make an early payment on their loan
D) When they refinance their existing loan

Answer 1

A borrower may be charged additional fees besides the credit reporting fee when they apply for a mortgage, request additional copies of their credit report, make an early payment on their loan depending on the terms, or most commonly, when they refinance their existing loan.The correct answer is option D.

Step-by-step explanation:

A borrower may be charged fees in various situations beyond the credit reporting fee. Some of those instances include:

• Applying for a Mortgage: When they apply for a mortgage, lenders typically charge an application fee that may cover a range of costs including administrative expenses and a credit check.
• Requesting a Copy of Their Credit Report: Usually, borrowers have the right to get one free credit report from each of the credit bureaus each year, but if they want additional copies, they may be charged.
• Early Payment on Their Loan: Some loans have a prepayment penalty, which means that the borrower might incur a fee for making payments before the agreed-upon timeline.
• Refinancing Their Existing Loan: Refinancing a loan typically involves various fees, such as origination fees, appraisal fees, and possibly others, depending on the lender and the terms of the refinance.

Therefore, the correct answer is D) When they refinance their existing loan, a borrower may be charged additional fees besides the credit reporting fee.The correct answer is option D.