I believe that many lender's fees are either not necessary or they are inflated.

Appraisal fee:  a lender needs to know that  their investment is being made on a property  that actually exists, and is worth more than  the loan.  You should not have to pay for a  full appraisal if, say, you obtained a loan last  year and are refinancing now.

Underwriting fee:  This fee is for the underwriter  who verifies employment, income and bank  activity to decide if the loan will be a safe  investment.   This is usually inflated, most  charge $200 to $500.

Tax service fee:   Lenders, claiming that they are trying to protect their borrowers from  losing their property at tax sales, usually  demand that the borrowers escrow money for  real estate taxes and insurance. The borrower on a monthly basis pays one twelfth of the  yearly real estate tax and insurance premium  to the lender, who then – at the appropriate  time -- pays the tax and the insurance bill. To my knowledge, few if any lenders pay any  interest on these escrowed funds; lenders make  a lot of money on the funds they hold. However,  to add insult to injury, at closing, the borrower is  required to pay a one-time “tax service fee”, in an  amount which ranges from $65-75. Presumably,  this fee is to reimburse the lender for the cost of  handling and paying the escrow amounts to the  taxing authority and to the insurance companies.

Processing fee:  A mortgage broker gets paid by the lender, and then charges you to "process" the loan.

Flood certification fee: in order to comply with  federal regulations and secondary mortgage  requirements, lenders are required to obtain a  certification from a surveyor that the property is  (or is not) in a flood hazard area. Clearly, this is  important information for a lender to have. But  there is no reason to charge a borrower amounts  ranging from $15-$30 in order to obtain such certification.

Real estate brokers administrative fee or "transaction" fee:  Watch for this, it is not necessary. Lenders will tell you they are giving you a great deal on the above-mentioned fees, then create a differently named charge to compensate.  Ask for the Good Faith Estimate, then go over it line by line.  Ask your realtor to assist you.   If need be, visit your lender with  your realtor to verify the necessity of these charges.  Some lenders will be helpful and reduce or waive certain fees to keep your business. Lending Related Articles: The Lending Maze   The Loan Process What Documents do I Need? Choosing a Competent Lender Learn about Unnecessary Fees When should I Pay Points on a Loan? The Different Types of Loans Closing Costs Explained