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 In this post, discover the real estate junk fees charged in mortgage closing costs and how to avoid paying them.

 Junk Fees – Mortgage Fees

There are plenty of experts out there pitching that people get out there and purchase a home.  This makes sense considering that money is pretty cheap right now.  Interest rates run for less than 4.5% for a 30 year mortgage as of this writing.  That is pretty darn good.  However, once you’ve gone down the homeowner rabbit-hole you’ll be getting some good faith estimates.  You are getting at least three of these, right?  Good.  Anyway, you will want to look out for Good Faith Estimate junk fees.  Some lenders love to sneak these mortgage loan junk fees into your mortgage closing costs.  This post will boost your awareness and help you avoid them.

Application Fee- Are you kidding me?  Yeah, let me pay you for the privilege of applying.  Uh, no way!  The whole goal of the lender is to get you to apply for a loan through them.  So, forget this fee.

Another nasty thing about application fees is that some of these lenders charge them so you feel obligated to keep the loan with them instead of switching to another lender with a better deal.  The Big Nasty.

This fee may not show up early in the process because lenders can’t charge application fees until they give you all of the loan details.

 Junk Fees – Mortgage Fees

Document Prep Fee- Yes, some lenders charge YOU for filling out forms and printing them.  Think this is supposed to be part of the deal. Forget about it!

Funding Fees or Wiring Fee- Ok, this is a fee lenders charge to get your loan money to the folks conducting your closing.  I figure that getting the money over there is their job.  Why should you pay for a wiring fee?  This one isn’t a deal breaker but I would be all over it.

Administrative Fee or Processing Fee- OK, this fee can be anything.  Lenders use this to just add what they want.  This could be a front for the documentation preparation fee listed above.  It could even be a charge for evaluating you as a customer.  I think they use this fee to pay for the “free” coffee, candies, and other junk food they have in the lobby.  WOW!

Lender Closing Fee or Lender Settlement Fee- What?  Since when is the closing covered by the lender?  I know about title companies, settlement attorneys, and escrow companies but lenders?  Nope!  Look out for this one.  It can get pretty high.

Appraisal Review Fee- This one looks kind of like something you should pay for, right?  The name sounds official enough but this is a junk fee.  Yes, appraisals are important.  However, this fee is for someone to check the FIRST appraisal.  They want to make sure they have covered all their bases before lending you the cash.

Lenders sneak this fee in so you have to pay to double-check instead of them.  Uh, no way!  Get it done right the first time with the right appraiser, no?  If they want to check the work of the first appraisal they should pony up the cash not you.

Rate Lock Fee- Uh, no honest lender out there is going to charge you to lock in a rate.  These scammers are taking your cash.  Forget this one too.

 Junk Fees – Mortgage Fees

Courier Fee- Yes, some lenders charge you to transport your paperwork somewhere. No way!  Send it encrypted in an email!  If they are going to charge you this fee make sure to ask for a receipt.  Either way, I think the lender should absorb this fee as a business cost.

The point is this:  You add all these fees together and it will cost you THOUSANDS.  Being a sucker is not cool.  Fight these fees and you’ll save big bucks.  This list is also applicable to refinance junk fees and make sure to investigate escrow junk fees too..  I am not saying shut down a deal for $30.  Pick your battles.  Fight the big mortgage fees for sure.  Or, you could just go nuts and refuse to sign unless all the junk fees get dumped! Nice.