Recording Fees

When closing on a property. be sure to take a good look at your HUD- 1 or closing statement. Some legitimate fees would be listed as: Origination Fee- Some people consider this a" junk fee" .however, most lenders charge it. but it should never exceed 1% of the loan amount.

Which fees are legitimate costs and which ones are junk fees? Appraisal Fee. Prepaid Interest. Credit Report. Prepaid Insurance. Document Preparation. Closing Fee.

Title Insurance or Simultaneous Issue. Tax Stamps. Courier or Wire Transfer Fee. Recording Fees. They are simply itemized fees created to increase profits for the lending institution. What are" junk fees" ?

It can be confusing, because most of them will have legitimate sounding names. They don' t process credit reports. Here are a few I' ve seen over the years: Processing/ Credit Report- One lender tried to charge a buyer$ 500 for this" junk fee" . They simply order one and their underwriter looks it over. but most of the time the FICO score will be the basis for approval or denial on the loan. Underwriting Fee- This one is fairly common, but still" junk" . This fee is completely out of line.

The underwriter is there to" underwrite" the loan. Broker Fees are legitimate charges- as long as they are not inflated charges. It's part of the process, and you shouldn' t be charged extra for it. Administration Fees/ Processing Fees- These fees are simply a way for the lender to pass their cost of doing business onto the homebuyer. Bank Inspection Fee. Lenders Inspection Fee.

Amortization Fee. Notary Fee. Administrative Fee. Application fee. But it's best to go over this with your Exclusive Buyer's Agent before closing. Most of the charges on your settlement statement will be legitimate. Ask questions about any charge that seems to be vague or excessive.

Better yet, make sure all your fees are shown up- front on the good faith estimate from the lender. Lenders frequently adjust these fees when confronted with someone asking questions. The lender, must provide you, by law with this document within 3 days of loan application. I would go so far as to say that if these" junk fees" show up in a good faith estimate, it would be advisable to find another lender right then. If there are any" junk" fees listed, now is the time to take care of them. or find another lender. Because they can always slip them into the closing statement. and it's not fun to deal with them at closing. Get references!

It's always a good idea to use a reputable lender.