Why are your closing costs so high?

You receive a Loan Estimate with closing costs that seem higher than expected. You ask the lender about it. Instead of lowering the fees or providing a competitive offer, the lender justifies why their fees are high.

But, here's what's really happening...

Now that you understand the tactic, let's look at the three most common angles lenders use to justify high fees.

➡ Three Ways Lenders Justify High Fees

Angle 1: Bundled Services Justification

Lender says: "We include a lot of services that other lenders charge extra for, so when you add it all up, we're actually very competitive. Other lenders might quote you lower fees, but they'll add more later."

Most people respond: "Okay, that makes sense. I appreciate that everything is included."

Don't do that. By law, Loan Estimates must include ALL lender fees in standardized sections. If other lenders were hiding fees, those fees would show up in black and white on their Loan Estimates. This lender's fees are simply higher—the "bundled services" explanation doesn't change the total cost you'll pay.

Angle 2: Transparency Justification

Lender says: "We're being completely transparent about all our costs upfront. Some lenders lowball their fees to get you in the door, then surprise you later. We show you everything from day one. Don't you appreciate that?"

Most people respond: "Yes, I really do appreciate the honesty. That's important to me."

Don't do that. This lender is using "transparency" as a justification for high fees. All lenders are required by law to provide standardized Loan Estimates that disclose all fees—transparency is not optional or special. You're not choosing between honest and dishonest lenders; you're comparing total costs across equally-transparent Loan Estimates.

Angle 3: Quality Justification

Lender says: "You get what you pay for. Our fees reflect the quality of service and expertise you're getting. Cheaper lenders cut corners, and that can cost you more in the long run with problems during closing or issues with your loan."

Most people respond: "That's true. I don't want to go with a low-quality lender just to save money."

Don't do that. This lender is implying a correlation between high fees and high quality that doesn't exist in mortgage lending. Loan officers are compensated regardless of their fee structure, and closing costs are mostly third-party services (title, appraisal, etc.) that don't vary based on the lender's "quality." You're not choosing between quality and savings—you're comparing lenders who offer the same standardized product.

The Pattern

Notice that in all three scenarios, the lender successfully avoided competing on price by making you feel good about paying more. High fees are high fees, regardless of the explanation.

➡ What You Should Say Instead

Regardless of which justification angle the lender uses, your response remains the same:

I appreciate you explaining the closing costs. Can you provide me with a detailed breakdown of all fees in writing? I'd like to compare the total cost of different loans, including both the interest rate and closing costs.

Here's why this response works for all three angles:

• For Angle 1 (Bundled Services): Forces comparison of total costs, not itemized justifications
• For Angle 2 (Transparency): Acknowledges explanation without accepting high fees as reasonable
• For Angle 3 (Quality): Refuses to equate high fees with high quality without evidence

The script treats fee explanations as noise and insists on comparing total costs using standardized Loan Estimates—which are designed by law to prevent hidden fees.

➡ Key Takeaway

Loan Estimates are standardized by law to show all fees in the same format. Compare total costs across lenders—explanations about bundled services don't matter if you're paying more.