Loan application fees are charged so that the financial institution can recover some of the costs of processing the loan. Loan processing costs include property appraisals, credit checks and the use of the bank personnel's time. Those applying for home mortgage loans are often required to pay an up-front loan processing fee. Such a fee is non-refundable whether or not the lender decides to offer credit to the individual applicant. Loan application fees that are more than $200 should be viewed with skepticism, and no matter what the total charge, the terms of the loan should be carefully reviewed before making a final financial commitment. Not everyone is charged a loan application fee. If the financial institution is anxious to secure someone's business, for instance, they may waive the fee.