Origination Fee
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
An origination fee is a lender charge for processing and underwriting a mortgage, usually 0.5%–1% of the loan amount.
What Origination Fee means
It appears on the Loan Estimate and is negotiable. Some lenders waive it in exchange for a slightly higher rate through a lender credit.
Florida example
On a $400,000 Florida loan, a 1% origination fee is $4,000. A borrower can sometimes trade a no-origination structure for a 0.125% higher rate, which may cost less if they sell or refinance soon.
What it covers
An origination fee is what a lender charges to process and set up your loan. It usually runs about 0.5% to 1% of the loan amount.
It pays for the work of underwriting and preparing your file.
What to watch
Some lenders charge more than others, so this fee is worth comparing. It shows up on your loan estimate.
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