How to Avoid Mortgage Junk Fees
- 1). Research reputable lenders. Check the government's website (in the resources bar) for a list of national companies known for honest origination and servicing of mortgages. Find a few companies that seem to offer loans that will meet your financial goals. For example, if you're looking to finance a new home purchase, a local community bank or credit union may be your best bet.
- 2). Speak with other mortgage consumers about their lenders. Most consumers have either great things to say about their lender, or a horror story about their closing. Getting this first-hand knowledge will help you avoid certain lenders or brokers who have reputations for overcharging and hiding fees.
- 3). Ask for a Truth in Lending and Good Faith Estimate after completing your original loan application. This document breaks down the estimated cost of doing business with a particular lender. These costs are not written in stone, but they will give you a brief overview of the estimated costs, and help you formulate your decision.
- 4). Ask for an updated Good Faith Estimate after major points in a mortgage process. These points include, but are not limited to: after a title search, after an appraisal, after income is calculated, after pre-approval, and, most importantly, after final approval. Make sure to confirm all fees (including origination fees) with the person handling your loan.
- 5). Keep a record of all fee disclosures and bring those to your loan closing. Make sure to schedule a meeting with your lender after your loan is final approved. At this point all the fees are determined - make sure you have your loan officer explain them in full to you. That is, before loan closing.
