What is Origination Fee?
An origination fee is what a lender charges to process and underwrite your loan, typically a percentage of the amount borrowed. It is one of the larger line items in closing costs. Comparing origination fees across lenders helps you judge the true cost of a loan beyond the rate.
Example: A lender charges a 1% origination fee on a $400,000 loan — $4,000 — listed among the buyer’s closing costs.