Origination Fee
Lender's fee for processing the loan, typically expressed as a percentage of loan amount (1 point = 1%).
The origination fee is the lender's charge for originating, processing, and underwriting your loan. Usually 0.5-1.5% of loan amount on conventional loans (one "point" = 1% of loan amount). Non-QM and DSCR loans typically charge 1.5-2.5%. Origination is included in APR. Some lenders advertise "no origination" but recover the cost via a higher rate (lender credit toward closing costs is the equivalent in reverse).
Related terms
Points (Discount Points)
Optional upfront payment to the lender to reduce your interest rate. One point equals 1% of loan amount.
Closing Costs
Fees and charges paid at closing in addition to the down payment. Typically 2-5% of loan amount.
APR (Annual Percentage Rate)
Total cost of a mortgage expressed as a yearly rate, including interest plus most loan fees and mortgage insurance.
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