Origination fee
A fee the lender charges to process and fund a loan, often a percentage of the loan amount. It appears on the Loan Estimate and is included in the APR.
Also called: loan origination fee, lender fee, processing fee
Related terms
The yearly cost of a loan including the interest rate plus certain fees, such as points and origination charges. It is usually higher than the interest rate and makes it easier to compare offers from different lenders.
Upfront fees paid to the lender at closing to lower the interest rate. One point equals 1% of the loan amount. Paying points makes sense mainly if you keep the loan long enough to recover the cost.
A standard three-page form a lender must give within three business days of a loan application, showing the estimated rate, payment and closing costs. It makes offers from different lenders easy to compare.
Fees and charges paid at closing on top of the price, such as lender fees, title insurance, recording fees, taxes and prepaid items. Buyers often pay around 2% to 5% of the price; sellers pay their own set of costs.
The bank, credit union or mortgage company that provides the loan money. The lender sets the rate and terms, underwrites the loan and holds or sells it after closing.