"Junk Fees"

The Washington Post had a good, though short, Q&A on “Junk Fees” from mortgage lenders. Many people know BoA has a big promotion running right now for their “no fee mortgage plus” which advertises $0 closing fees and $0 application fees, with no PMI. (Update July 2007: See the article about whether BoA’s program really saves you money here.)

But what are these fees? And which ones are negotiable? Here are some excerpts from the WP, and you can read the full entry here.

The first category of charges listed are those items payable in connection with your loan. These may include an origination fee, points, appraisal fee, credit-report fee, mortgage-broker fee, underwriting fee, processing fee, courier fee and wire transfer fee. An origination fee and points are typically a set fee that you have agreed to pay to obtain your loan. It may be a percentage of the loan amount, say 1 percent.

An appraisal fee and a credit-report fee are typically not negotiable, as the lender or your mortgage broker will order these.

The mortgage-broker fee listed on the good-faith-estimate form is negotiable. The lender’s inspection, underwriting and processing fees may be somewhat negotiable, but many lenders stay fairly firm on these fees.

Courier and wire-transfer fees are typically charged for transferring loan documents to the escrow closing company and wiring the loan proceeds to the closing officer. You may ask that these be reduced or waived.

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