What Is a Document Preparation Fee on a Mortgage?
A document preparation fee — typically $75 to $600 — is one of the most common junk fees on Closing Disclosures. Lenders charge it for preparing your loan documents, but document preparation is already covered by your origination fee. The CFPB has specifically flagged doc prep fees as an example of unnecessary charges. This guide explains what it is, why it's usually unjustified, and exactly how to ask your lender to remove it.
What the document preparation fee is supposed to cover
According to lenders who charge it, a document preparation fee covers the cost of preparing, printing, and organizing your loan documents — the promissory note, deed of trust or mortgage, truth-in-lending disclosure, and other closing paperwork.
In practice, this work is performed by loan processing software that generates documents automatically once the loan data is entered. The marginal cost of 'preparing' documents for any individual loan is minimal — it's a near-zero variable cost for the lender.
Why it's considered a junk fee
The origination fee is the lender's compensation for originating your loan — which includes processing, underwriting, document preparation, and all other steps required to take your application and turn it into a closed loan. When a lender charges both an origination fee and a document preparation fee, they're double-charging for the same service.
The CFPB's mortgage servicing guidelines specifically call out document preparation fees as an example of charges that may duplicate services already compensated by origination charges. Several state attorneys general have taken enforcement action against lenders for charging doc prep fees on top of origination fees.
The fee also fails a basic test: can the lender clearly explain what specific service it covers that isn't already included in origination? In most cases they cannot, and will simply describe the same general document-handling work the origination fee is supposed to cover.
See how this applies to your specific fees
Upload your Closing Disclosure for a personalized analysis in 60 seconds.
How much is a document preparation fee?
Document preparation fees on Closing Disclosures typically range from $75 to $600, with most falling between $150 and $400. The amount has no relationship to the loan size or complexity — a $400 doc prep fee on a $600,000 loan and a $400 doc prep fee on a $200,000 loan represent the same flat charge for the same automated process.
Some lenders don't call it a 'document preparation fee' — watch for these variations on your Closing Disclosure:
- Doc prep fee
- Documentation fee
- Loan document fee
- Document handling fee
- Paper preparation fee
- Closing document fee
How to get it removed
Request removal in writing before your closing date. Email your loan officer directly — don't call, because a written request creates a paper trail.
Use this language: 'I've reviewed my Closing Disclosure and noticed a document preparation fee of $[amount]. My understanding is that document preparation is included in the origination charge. I'd like to request that this fee be removed from the CD, or receive a written explanation of what specific service it covers that isn't already compensated by the origination fee.'
Most lenders will remove the fee rather than try to justify it in writing. If they push back, ask them to confirm in writing that the document preparation fee covers work not included in origination — a test most lenders would rather avoid.
If the lender won't remove it, ask for a lender credit of equal value. This is a different line item that reduces your total cash to close by the same amount without technically changing the fee structure.
Related fee benchmarks
Find out which fees to push back on.
Upload your Closing Disclosure now and get instant, personalized results — including which of your specific fees are negotiable.
From $29