Mortgage Junk Fees: 15 Charges on Your Closing Disclosure You Shouldn't Pay

What makes a closing cost a 'junk fee'?

A junk fee is a charge that is vague in description, duplicative of another fee you're already paying, or dramatically above its actual cost. The term was popularized by the CFPB and the White House's 2023 junk fee initiative, which specifically called out mortgage closing costs as a problem area.

The origination fee is supposed to be the lender's all-in charge for processing and underwriting the loan. Junk fees work by itemizing sub-tasks that are already covered by origination — then charging for them again separately. A lender charging a $1,500 origination fee plus a $400 processing fee plus a $300 underwriting fee is effectively charging $2,200 for one service.

The 15 most common mortgage junk fees

These fees appear frequently on Closing Disclosures. Each one should be questioned — either by asking for removal or by requesting a detailed explanation of what service it covers that isn't already included in your origination charge:

• Document preparation fee ($75–$600) — preparing loan docs is part of origination
• Administrative fee ($100–$500) — too vague to justify; ask what it covers
• Processing fee ($200–$900) — duplicative if you're also paying an origination fee
• Underwriting fee ($300–$900) — same issue; underwriting is a core lending function
• Application fee ($100–$500) — should be applied toward closing costs, not added on top
• Rate lock fee ($100–$500) — standard 30–60 day locks should be free
• Wire transfer fee ($25–$75) — actual cost is under $10; markup is pure profit
• Courier / delivery fee ($25–$100) — physical delivery is rare; electronic is standard
• Email fee / fax fee ($25–$75) — not a real cost in 2025
• Tax service fee ($50–$100) — lenders charge for monitoring your property taxes, but this is a minimal automated service
• Flood certification fee ($10–$25) — legitimate but sometimes charged twice
• Funding fee ($100–$350) — vague; usually duplicative of origination
• Settlement fee / closing fee (inflated) — legitimate service, but can be shopped; $300–$600 is normal, anything above $800 warrants scrutiny
• Title search fee (inflated) — same; $150–$300 is normal, higher amounts should be questioned
• Notary fee (inflated) — $75–$150 is normal; $250+ is excessive

How to request removal of junk fees

The most effective approach is a direct, specific written request. Don't ask for all fees to be waived — that reads as uninformed. Instead, identify 2–4 specific fees and ask for a written explanation of what each covers that isn't already included in your origination charge.

Email template: 'I've reviewed my Closing Disclosure and have a question about [fee name] ($X). My understanding is that [document preparation / processing / underwriting] is typically included in the origination charge. Could you explain what this fee covers separately, and whether it can be removed or reduced?'

Lenders frequently remove junk fees when asked — especially for borrowers with strong credit or competitive offers from other lenders. The key is asking before you're sitting at the closing table.