This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How to Avoid 'Junk' Mortgage Fees and Save Hundreds on Your Home

BOSTON (MainStreet) -- Homebuyers and refinancers can save potentially hundreds of dollars or more on their mortgages if they make sure their banks throw out "junk" fees.

"'Loan-application fee,' 'processing fee,' 'funding fee' -- lenders come up with so many names," says Polyana da Costa, senior mortgage analyst at Bankrate.com (RATE). "Every lender will charge you some fees for a mortgage, [but] if they charge you every type of fee you've ever heard of, it's time to look for another lender."

Lenders large and small sometimes pad a mortgage's closing costs with several small fees that cost a few hundred dollars or less each but can add big bucks to your total closing costs. In addition to those noted above, other questionable fees some banks charge include "email fees," "PDF fees," "document-printing fees," "document-preparation fees," "administrative fees" and the ever-popular "miscellaneous."

Some banks or mortgage brokers will even charge you twice for the same service -- assessing, say, an "origination fee" and a "broker fee" even though they're the same thing.

Worse, it's not always clear what -- if anything -- lenders really do to earn such fees.

Da Costa says the easiest way consumers can avoid junk charges is to simply make your lender or broker explain what any questionable expense covers.

"Ask what it's for," she says. "You don't have to pay for something that you don't understand."

If your lender won't drop a questionable fee outright, they might haggle on its price if you threaten to walk away -- even if you're already at the closing table.

"Few consumers realize that they're not obligated to sign things just because they're at a closing," da Costa says. "If you don't agree with certain charges, don't close."

Here are some other tips for getting the junk out of your mortgage's costs:

Scrutinize all paperwork
Every lender must by law give you a form called a "Good Faith Estimate" of closing costs within three days of taking your loan application. The bank must follow up with a "HUD-1" form of final costs at least 24 hours before your scheduled loan closing.

Lenders use standardized forms for the HUD-1 and Good Faith Estimate so it's easy to see which fees the lender is charging.

On the Good Faith Estimate, look at sections titled Our origination charge, Required services that we select and Required services that you can shop for.

On the HUD-1, look at items in the sections titled 800. Items Payable in Connection with Loan and 1100. Title Charges.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,912.11 -70.48 -0.42%
S&P 500 1,969.95 -8.96 -0.45%
NASDAQ 4,442.6980 -2.2110 -0.05%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs