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Preparation Fees (Doc Prep Fees)
A document preparation fee is charged by a lender for preparing loan documents
such as the mortgage, note and other legal disclosures. The charging of
this fee is illegal in some states unless the work is done by a licensed
attorney. Some insiders call this fee a “junk” fee, because
it is a easy way to increase gross profit by dressing up expenses with
fancy labels.
The document preparation fee can cost anywhere from $20-$400 depending
on the size of the loan, if the lender is dealing with both sides (buyer/seller),
if everything is done online, or if the loan and process is done in a
sit-down visit in an office. These fees, as with most fees on a mortgage,
are negotiable.
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