Hidden Lender Junk Fees

1. Application Fee

Many mortgage applications do not require an application fee. Although you need to complete the mortgage application to get the mortgage, you do not need to pay the application fee to get one

2. Appraisal Fee

A lender wants to know that the property on which a loan will be made is worth at least the loan amount. Your lending institution may request an appraisal of the property, which would be your responsibility to pay for. Appraisals can vary in price from approximately $200-$400. However, if you are refinancing a loan which you had applied for in the last year, the lender does need to have the home appraised again.

3. Closing Review Fee.

Sometimes the lender will charge you for going over the closing documents. The Closing Review Fee is unnecessary

4. Courier Fee

Be wary of unnecessary delivery fees. Some companies will charge you for courier fees even when they haven’t used a courier.

5. The Credit Report Fee

The Credit Report Fee  is a necessary evil to help place the borrower in the best mortgage. The fees surrounding these services vary depending upon the kind of report necessary to evaluate the credit worthiness. These reports are time sensitive and may require being updated prior to closing. Be concerned of charges exceeding $75.00

6. Discount Points

Are used to adjust the yield of the mortgage to correspond to market conditions. Make sure that you aren’t paying for more points than you agreed to when you first signed up for the loan. If there are discrepancies between what you thought and what the lender has put into writing, discuss them with your lender before signing the agreement.

7. Document Drawing / Signing Fee

Sometimes the escrow company will charge a fee for printing the documents and having you sign them. Question your escrow company if you come across it. If your Lender actually closes the loan portion  themself this should not exist.

8. Document Preparation Fee

Some lenders will charge a fee for printing the loan documents. Also commonly referred to as the Processing Fee. This is part of their job and the fee is one of junk fees that you should not have to pay.

9. Escrow Charges

The escrow company accepts all the monies, gets the deed prepared, and handles the actual closing of the transaction. An escrow fee is required. But again, compare what different escrow companies are charging to get the best rate. Check to see if the title company and the escrow company are affiliated. They may have discounts available if you use both of their services.

10. Impounds

If your mortgage was for more than 80% loan-to-value ratio, you will probably be required to impound taxes and insurance. The lender will collect a couple of months of taxes and insurance from you in advance in order to get the account started, and you then pay them on a monthly basis as part of your monthly house payment. Make sure that the correct amount and not more is set aside.

11. Impound setup

Challenge any setup costs. One of the Lender's primary responsibilities is to set up the impound.

12. Lenders Attorney fee

You should not be required to pay the lender’s attorney fee. It should be included aspart of the services they provide.

13. Lender’s title insurance

Most lenders require a separate policy of title insurance. Compare the different rates to find the best one.

14. Mortgage Insurance Premium

If you have an FHA loan or a loan for more than 80% LTV, you’ll have to pay for this insurance just in case you default on the mortgage. If this charge does not apply to you, question why.

15. Origination Fee

This is like a start up cost. Most lenders will include this fee and not waiver it. However, you can find lenders who do not add this fee on top of their interest.

16. Underwriting Review Fee

Lenders usually hire underwriters to double check a buyer’s employment and income to make sure that everything is in order. The lender should pick up any fee that the underwriter charges. Usually the underwriter fee varies from $200-$400. Always ask if the Lender would pay this fee or at least a portion of it.

17. Warehousing Fee

Lenders sometimes charge for the interest on the mortgage between the time the lender makes it available to you and the time the deal actually closes. Theres no need for you to pay interest on it until you receive the mortgage. If for some reason a closing was extended a few days beyond the origional closing date, this fee could become an issue.

18. Administrative Fee

Some Lender's may charge a separate fee for writing and managing your documents. This is another example of a charge for a job that is routine for an Buyer's Agent.

19. Your Best Bet

Interview Mortgage Bankers and make certain they know you are shopping around for the Best Deal possible. Compare fees and products they present to you. Many options are available, find the one that best serves your needs. Personal satisfaction and Gut Feel will go a long way toward guiding you. How many mortgage loan transactions does the Lender close each month? How long have they been with this company? Why did they move. 

20. Good Faith Estimate

You should never have to ask for a Good Faith Estimate. But if you do not get one then ask and compare them "Apples to Apples" to see what you are getting, what you are paying. It's your money. Long after the deal closes you will still be paying in your monthly payment.

Finally, your Buyer’s Agent works with many, both good and well ah so lenders, lots of them, who do they recommend.

Listen closely and follow their recommendation s.