Death in the family, illness, loss of a job, or divorce can take a great toll on our daily lives and finances. If tragedy strikes and you are unable to afford your monthly mortgage payments and find yourself falling behind, you may be able to modify your home loan to catch up and avoid foreclosure.
Identifying Junk Fees in Your Good Faith Estimate
When potential homeowners receive their Good Faith Estimate, they should look out for common junk fees. A junk fee is any charge that serves no purpose other than to create additional revenue for the lender. Being able to identify these fees can save borrowers hundreds to thousands of dollars.
Your GFE Provides a List of Fees
When you apply for a home loan in KC, your lender is required to provide you with a Good Faith Estimate, or GFE. This document shows the loan terms and an itemized list of the settlement fees your lender intends to charge you for providing and closing your loan.
Fees should be clearly stated on your GFE. However, keep in mind that the GFE is only an estimate for the fees associated with your possible home loan in KC. Fees that are listed include, but are not limited to:
- Application fee
- Origination and broker fees
- Inspection fee
- Underwriting fee
Examine All Fees Before Closing
At the closing table for your home loan in KC, you may see some extra charges on your GFE that were not listed previously. You have the right to dispute junk fees as soon as you identify them and ask your lender what each fee covers.
Remember that origination and broker fees are one and the same. They should not be listed as two separate charges. Also, watch out for miscellaneous items and be sure to ask your loan officer to specify what the fee is for. It’s also a good idea to compare the fees listed on your HUD-1 settlement statement to your Good Faith Estimate to make sure they match. Since HUD-1 statements are used during the loan shopping process, be sure you reference the statement issued for the right loan.