Buying a home can be a long (and expensive!) journey. And the last thing you want to encounter on closing day are a bunch of unexpected, unnecessary, and costly fees.
But what, exactly, are these fees, and how can you avoid paying them?
A recent article from realtor.com answered common questions about mortgage junk fees, including:
- What are mortgage junk fees? Closing costs are normal, but some fees are just a money grab. Mortgage junk fees are unnecessary charges that less-than-trustworthy lenders and brokers may charge as a way to increase their profit on your home purchase.
- What are some examples of mortgage junk fees? While there’s no universal standard for what’s considered a legitimate closing cost vs. mortgage junk fees, some fees that may warrant some exploration and questioning include things like administrative fees, email fees, document preparation fees, courier fees, or wire transfer fees. You should also look for fees that might be repetitive. For example, origination and broker’s fees are the same thing, so you shouldn’t be paying both.
- What should you do if you spot mortgage junk fees? Lenders are required to give good faith estimates (GFEs) to customers at the beginning of the loan process. These include line-by-line estimates of different fees you’ll be paying. If you notice fees that seem questionable, ask your lender about them, and try to negotiate to either lower or eliminate them. If your lender won’t budget, consider shopping around for another lender with fewer fees.