Real Estate Knowledge - What is a Loan Origination Fee?


The down payment isn’t the only expenditure you’ll have when closing on a house; you’ll also have to pay closing costs, which could add up to 2-5 percent of the purchase price of the home.  If you take out a loan then chief among these closing costs is the loan origination fee, which is charged as compensation for the research your lender has done on you to determine whether you would be a trustworthy borrower. With an understanding of the loan orientation fee, you can become a savvier homebuyer and a more knowledgeable borrower.

What is a loan origination fee?

The loan origination fee pays for the costs of originating the mortgage. Costs covered under the loan origination fee include:

  • Paperwork
  • Verifications
  • Calculations were done to determine your mortgage rate
The loan origination fee is simply a cost meant to pay for the research your lender has done on you as a borrower. The loan origination fee is usually about 1 percent of the total home loan, but that can change depending on a number of factors.
So now you know.  Please don't hesitate to call me with any of your Real Estate needs.

Information from this blog was taken from a recent article from 2016

Warmest Regards,

Kevin Aizenshtat


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