Financial fees bite.

Individually, they may appear to be small and annoying additions to the cost of your transaction.

Add them up, however, and they can take a good sized chunk out of your wallet -- a total of about $216 billion a year paid by consumers for all financial services, according to Consumer Reports.

In "Financial Services: Don't Get Taken By Hidden Fees" Consumer Reports recounts a litany of fees -- sometimes "no-see-ums" -- for a host of financial services from credit cards to variable annuities.

Consumer Reports rates goods and services and earlier this year examined new home defects and online mortgages.

"For individual consumers, fees can be needlessly onerous: They can drive you deeper into debt, drag down an otherwise profitable investment, and lock you into an insurance policy or mortgage that ultimately makes no sense," the consumer rater of goods and services wrote in the report.

Perhaps no financial transaction is as heavily laden with financial fees as are mortgages.

The sheer number of them makes it nearly impossible to actually compare them from one lender to another.

What's worse, some of them don't show up until a day or so before closing.

However, beginning with the idea that everything in a real estate transaction is negotiable, Consumer Reports says you can find ways to save on mortgage fees.

Consumer Reports says a big cost that drives up closing fees are yield spread premiums (YSPs). Simply put, they are fees lenders pay brokers for selling more expensive loans and by law they don't show up until its time for you to see the final settlement sheet, typically the day of or the day before you must sign the paperwork.

"Such payments are not clearly disclosed to borrowers, and several lawsuits and congressional testimony have maintained that many such rebates are payments from banks to mortgage brokers to induce the buyer to take out a mortgage with a higher interest rate," Consumer Reports says.

Consumer reports also said lenders pass on legitimate costs from third parties including credit report fees, property appraisals and title and escrow costs, but they could also add a markup to those costs. The magazine also said lenders tack on "nuisance fees" that should be included in the overhead.

The magazine also said the legally required Good-Faith Estimate of costs, which the lender must submit soon after you apply for a mortgage, doesn't give you a clear financial picture. Add in YSPs the day before closing and other costs that may honestly not be levied until later and your actual loan costs could grow by thousands of dollars by closing day.

So how do you get around those fees? In many cases you can't but you can ask for some sort of proof or explanation for each fee on your settlement sheet. You can also negotiate to have inexplicable fees removed. Be assertive.

Ask to see all the final costs as many days as possible before the actually closing date when you have to sit down and sign the loan papers. If you can't decipher the fees get help from a trusted professional or other person who's recently experienced a mortgage closing. Be prepared not to complete the loan signing if you are satisfied with an explanation for all the fees or can't negotiate away a fee you think is exorbitant.

Consumer Reports also advises:

Published: April 30, 2004

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.