Lender Junk Fees

For the most part, lenders’ application fees are reasonable.  But some lenders have been getting creative with fees, warned attorney Howard Newman.  Some lenders will entice borrowers with a low application fee.  They later make up for this by charging “junk fees” that show up somewhere else as part of the closing costs.

Closing costs are fees and charges tacked on to the mortgage over and beyond the interest rate being quoted.  They usually run between 6 and 8 percent of the mortgage amount being borrowed.  Closing costs include attorney fees, title insurance and points.   One point is equal to 1 percent of the mortgage amount borrowed and must be paid upfront at the closing.  Only with FHA loans can points be financed along with the rest of the mortgage.

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