When shopping for a lender, many people only look at the rates and not at the other attendant costs of obtaining a mortgage. This can be a mistake, because some lenders can add extra fees, pad existing fees and charge substantial sums for vaguely defined fees. By shopping around, finding out what government agencies charge for their fees, asking for relevant documentation, and requesting the reduction or waiving of some fees, you can save hundreds, sometimes thousands, of dollars.

Shop around, not only for the best rates, but also for the best fees. Different lenders will have different fees and many may waive or reduce some fees in exchange for your choosing them. There are also outside agencies you can use to get a better rate on some fees. Be sure to consult with your lender to see if they will accept an outside agency into their overall mortgage plan.

Lenders must provide a 'good faith estimate' within 3 business days of a loan application. This is a detailed list of fees associated with a mortgage loan. It is only an estimate; the closing costs may not reflect the marked fees. Go over this estimate carefully and take note of the fees.

Investigate vague terms, like "processing fees". Ask to have them broken down into specific charges, reduced, or waived entirely. Ask for a documented copy of costs, which will tell you what your money will be spent on

Some lenders will try a 'bait-and-switch' on unsuspecting buyers. This entails a relatively low estimate of the fees and then a sudden increase at closing. One way to combat this is to obtain the HUD-1 settlement sheet a few days before closing. Note all differences to the good faith estimate and question any changes.

Padded fees are another way that lenders add to your costs. Find out what government fees in your area are and don't pay more for them. If your lender uses an outside company for some of the necessary procedures, like surveying, get a copy of the receipt.

Some fees can be negotiated or waived, such as the mortgage-broker fee and courier costs. Others, like the appraisal and credit report are generally not so flexible. Don't hesitate to ask for a better deal.

Receipts are an important part of avoiding junk fees. Asking for copies of all receipts associated with the costs of the mortgage can clue lenders in that you are keeping track of the true cost of the things that need to be performed or provided. They are also excellent things to have for your own records.

Do not sign any documents until you have read over and understand every charge that you are acknowledging with your signature. Once you sign documents, they are very hard to change later.

'No fee' mortgages are being offered by some institutions, but these must be looked at critically. Often, the interest charged over the period of the mortgage is much greater than the one-time fees charged by other institutions. These lenders should be considered just another contender in the quest to get the best deal.

Carefully considering different lenders, gathering information about fees and insisting on documentation of all expenditures will greatly improve your chances of avoiding 'junk fees' and saving money on fees overall. Don't be afraid to question fees and challenge ones that are much higher than other lenders.

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