Origination Fee

An origination fee is a charge to the borrower to cover the services that the mortgage company is providing.

Origination Fee is included in the calculation of the Annual Percentage Rate (APR). The APR is designed to demonstrate the true finance cost of the loan. It adds up all lender charges and is expressed in terms of interest rate.

A fee paid to a lender for processing a loan application. The origination fee is stated in the form of points. One point is 1 percent of the mortgage amount.

It is important to compare all the mortgage broker fees on your GFE. You may have a lower than average origination fee that is supplemented by higher "junk" fees.

This fee can vary from lender to lender. Watch to make sure you are comparing apples to apples though. Some people may charge a small origination fee but also a mortgage broker fee and a processing fee and an application fee. So pay attention to not only the origination fee, but all fees being charged and compare the totals against each other. If you have any questions about the fees, please ask.