Question:

Loan Origination Fee Definition

Answer:

Loan origination fee is charged for any new loan. It is paid to the lender for originating the loan. The loan origination fee varies from 0.4 to 3 percent of the loan and depends on the credit score of the borrower. Sometimes the borrower is offered to buy points towards the origination fee in order to get lower rate for the loan.

Discount points and the origination fee should appear on the quote (the good faith estimate) you get from the lender and on the final HUD-1 loan settlement form.

In a no cost loan origination fees will be rolled into the loan and result in higher interest rate.

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