For most consumers, the difference between a junk closing fee and an actual closing costs necessary to complete the real estate closing process can be difficult to discern.
However, for those of you that have done your research (or read this post), it becomes more obvious that most junk closing fees are hiding in plain sight.
As a starting point, junk closing fees are those charges included as part of the closing costs that provide extra income for the closing and title agent beyond the standard closing or settlement fee.
These junk closing fees can be closing cost items that are charged and have no corresponding expense for the closing and title agent or items where the charge is grossed up well over the actual cost incurred by the closing and title agent.
The following are some primary examples of junk closing fees to look out for:
- Typical junk fees with no corresponding actual expense:
- Document preparation fee
- Electronic storage fee
- Wired funds charge
- Courier charges (with no lender involved)
- Title examination fee
- Potential junk fees when expenses are grossed up:
- Title endorsements charges
- Title search charge
- Lender title policy charge
- Courier charges (with lender involved)
Having an awareness of these potential junk fees puts you in the best position to understand the standard closing costs to compare between closing and title service providers.
LegalClose provides you with an up-front, transparent breakdown of the predicted closing costs with no hidden junk fees.