Hidden Fees

Unfortunately many bad credit mortgage lenders hide fees.  This seems to be more prevalent in lenders who specialize in refinancing people with bad credit.  These fees can be snuck in where you don't expect them.  They are universal for bad credit mortgages and refinances.  With refinances there seems to be more hidden fees. Here are a few fees to watch out for. 

Application fees
Just because the lender says there isn't a fee, doesn't mean that he won't backcharge you for it later when you finalize the loan.  Many times they will backcharge it and say, "there is no fee for people with good credit, but we charged a fee because your had bad credit."

Yield-spread premium
This occurs when a bad credit mortgage lender arrange a loan with an inflated interest rate.  The broker then gets a larger payment.  This can be up to $10,000 over the life of the loan.

Closing costs
Disclosing closing costs is an art not a science.  Be sure to check with the title agent and escrow officer regarding these.

Down payment penalties.
This applies to bad credit mortgage loans.  If you dont' have 20% down you may be required to carry mortgage insurance, which can be expensive. 

Appraisal Fees
Some lenders who deal exclusively with people who have bad credit looking to refinance or get a new mortgage will charge excessive appraisal fees, be sure to shop around.