What does the term "advance fee" refer to in mortgage lending?

The term "advance fee" in mortgage lending refers specifically to a fee that is paid upfront for services related to loan origination. This may include processing applications, underwriting, and other related services that are necessary before the loan is finalized. Originating a loan involves several steps which can incur costs for the lender, and the advance fee allows the lender to recover some of these costs before the actual loan is approved or disbursed.

In contrast, other options describe different types of charges that borrowers may encounter during the mortgage process. For example, a charge for late payments pertains to penalties for not making mortgage payments on time, while a payment for property appraisal is specifically associated with the process of determining the value of the property. Title insurance costs are associated with protecting against loss from defects in the title, which is a separate aspect of the mortgage transaction. Each of these options relates to different fees, but the advance fee is directly linked to the services provided in the initial stages of securing a mortgage loan.