Junk fees cover a lots of different types of charges. They can be stated upfront in a good faith estimate for a mortgage, or they can pop up as last minute surprises.
Junk fees can include:
excess mortgage broker or lender fees
too many points
high processing fee
high administration fee
Excessive mortgage broker or lender fees can come in different forms. For starters, compare your interest rate offers from different sources. You may be surprised how different they can be even though all of the lenders are using the same application information from you to make an offer. Your offer on the interest rate is a basic point of comparison.
Some lenders or brokers will charge you too many points. A point is 1% of the loan amount. Generally anything over 1%-1.5% is too much in the way of points. The exception to this may be if you are un unusual type of loan that requires a lot more work than usual. This can be because of severely damaged credit, among other reasons.
Processing and administration fees are also something that can be unnecessary. Check on the offer to see if these fees are negotiable. Even when someone claims they are not they still may be. Generally any processing fee or administration fee over $1,000 is too much.
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