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- Junk fees
Junk fees
- By Zitrof Real Estate
- Published 08/22/2009
- Real Estate Glossary - J
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Junk Fees is a term for lender fees expressed in dollars rather
than as a percent of the loan amount.
There are several types of Junk fees such as: processing fee, underwriting fee, document preparation fee, settlement fee, express mail fee, lender's attorney fee, affiliate consulting fee, bank inspection fee, notary fee, signup fee, Amortization fee, messenger fee, funding fee, document review fee, photograph fee, translation fee, administrative fee, Assumption Fee, lenders inspection fee and application fee.
Not all upfront lender charges are junk fees. Points are an upfront fee, which is calculated ass a percent of the loan, are a part of the cost of credit along with the Interest rate. Now there are also third party fees, such as “Appraisal
fee" and
"Credit report fee”, which borrowers pay to third party companies.
How to Avoid Junk Fees:
Lenders and mortgage brokers are required to provide you with a Good Faith Estimate, normally within three days of requesting a loan through them. This is an estimate of fees, and not required to be exact. But this a way to help you reduce junk fees, as some will list some of these fees here. Always remember to compare rates and fee amongst those who give you estimates.
When you are ready to close request your Closing Costs, otherwise known as a HUD-1, from the Closing agent a few days early. Most states require that the buyer be provided the Closing statement 24-28 hours prior to closing. Now go over the statement, and look for all the junk fees as listed above. You lender will not remove all of them, but let them know that you are not paying their junk fees, and most will be removed or discounted.
There are several types of Junk fees such as: processing fee, underwriting fee, document preparation fee, settlement fee, express mail fee, lender's attorney fee, affiliate consulting fee, bank inspection fee, notary fee, signup fee, Amortization fee, messenger fee, funding fee, document review fee, photograph fee, translation fee, administrative fee, Assumption Fee, lenders inspection fee and application fee.
Not all upfront lender charges are junk fees. Points are an upfront fee, which is calculated ass a percent of the loan, are a part of the cost of credit along with the Interest rate. Now there are also third party fees, such as “Appraisal
How to Avoid Junk Fees:
Lenders and mortgage brokers are required to provide you with a Good Faith Estimate, normally within three days of requesting a loan through them. This is an estimate of fees, and not required to be exact. But this a way to help you reduce junk fees, as some will list some of these fees here. Always remember to compare rates and fee amongst those who give you estimates.
When you are ready to close request your Closing Costs, otherwise known as a HUD-1, from the Closing agent a few days early. Most states require that the buyer be provided the Closing statement 24-28 hours prior to closing. Now go over the statement, and look for all the junk fees as listed above. You lender will not remove all of them, but let them know that you are not paying their junk fees, and most will be removed or discounted.
