A junk fee is a term defining “extra” fees, which are charged to the client at closing. It is important to know that you may be able to negotiate these fees down or have them removed if they have not been properly disclosed to you. The Loan officer is required to provide you with a Good Faith Estimate disclosing all fees within three days of your application.
Fees associated with the following are NOT considered junk fees: appraisal, credit report, underwriting, attorney, title search, title insurance, document recording, notary, tax service, flood certification, MERS, title endorsements and survey. These are legitimate fees charged by third parties and are necessary to complete the transaction. In addition your loan originator may have some fees like processing and origination fees that are part of necessary costs to close your loan. Always ask your loan officer if you are unsure of a fee and if it is negotiable.