Definition
This is the lender's fee (typically 0.5-1.5% of the loan amount) for processing, underwriting, and originating your loan. It's a standard cost you'll encounter with any lender.
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Typically 0.5-1.5% of loan amount. Covers lender operational costs. Non-negotiable component. Different from other fees. Professional vs. online lenders vary. Comparison shopping reveals differences. Origination fee impact on total cost. Included in APR calculation. Professional charging standards. Negotiation sometimes possible. Significant cost component.
Pro Tip
Compare origination fees across lenders. This is a negotiable cost worth shopping.
Example
1% loan origination fee of $4,000 was charged on $400,000 mortgage.