Junk fees are vague, duplicative, or inflated charges that pad lender profits without providing real value. They can add $500 to $2,000 or more to your closing costs — and most buyers never push back. This guide identifies the 15 most common junk fees, explains why each one is questionable, and gives you the exact language to request removal.
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 $2,200 for one service.
These fees appear frequently on Closing Disclosures. Each one should be questioned — either by asking for removal or by requesting a detailed explanation of what service it covers that isn't already included in your origination charge:
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The most effective approach is a direct, specific written request. Don't ask for all fees to be waived — that reads as uninformed. Instead, identify 2–4 specific fees and ask for a written explanation of what each covers that isn't already included in your origination charge.
Email template: 'I've reviewed my Closing Disclosure and have a question about [fee name] ($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.
Junk fees are vague, duplicative, or inflated charges on your Closing Disclosure that pad lender profits without providing real value. Common examples include document preparation fees, administrative fees, processing fees charged on top of origination, courier fees, and email/wire fees. They can add $500 to $2,000 to your closing costs.
Send a written request to your loan officer identifying 2–4 specific fees and asking for a written explanation of what each covers that isn't already included in your origination charge. Lenders frequently remove junk fees when asked, especially for borrowers with strong credit or competitive offers from other lenders.
Yes, a document preparation fee is widely considered a junk fee. Document preparation is a standard part of loan processing that is already covered by the origination fee. The CFPB has specifically called out document preparation fees as an example of unnecessary charges. Typical range is $75–$600, but it should be $0 if you're already paying an origination fee.
The most common junk fees are document preparation fees, processing fees charged separately from origination, administrative fees, and underwriting fees. All of these typically cover tasks already included in the origination charge. A lender charging origination plus processing plus underwriting is effectively triple-charging for the same service.
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