Question:

What are mortgage junk fees?

Answer:

Mortgage junk fees are often disguised by the lender. There are a lot of fees related to a loan, and they are supposed to be disclosed on the Good Faith Estimate. However, the GFE has no binding force and lenders often deviate up in the hundreds and sometimes thousands in final closing costs.

Junk fees are often itemized to persuade the borrower that it is important to compare them when comparison shopping, while in fact the thing that matters to the borrower is to know in total how big these costs are for each lender. Mortgage junk fees are charged upfront, and can include items as express mail delivery, application fee, sign up fee, etc. On top of all, because many borrowers will look at the origination fee when comparing quotes, the quoted origination fee may be very low, and many junk fees won't be quoted until closing when the borrower is almost unable to back off without losing money.

To avoid being charged too much mortgage junk fees, it is wise to ask if the lender will set bottomline lender fees.

Also, have in mind that escrow fees, points and per diem interest, despite charged upfront, are not mortgage junk fees and neither are third-party services.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
Was this Mortgage QnA helpful?
Not at all
  • Currently 2.9/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA: