Origination fee

Origination fee

An origination fee, or activation fee, is a payment associated with the establishment of an account with a bank, broker or other company providing services handling the processing associated with taking out a loan.

An activation fee is typically a set amount for any account. However, an origination fee usually varies from 0.5% (half a point) to 2% (two points) of a given loan amount, depending on whether the loan was originated in the prime or the subprime market. For example, an origination fee of 2% on a $200,000 loan is $4,000.

Discount points are used to buy down the interest rates, temporarily or permanently. Origination fees and discount points are both items listed under lender-charges on the HUD-1 Settlement Statement.

Notes



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Look at other dictionaries:

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  • Aria the Origination — Aria (manga) Pour les articles homonymes, voir Aria (homonymie). ARIA アリア (A …   Wikipédia en Français

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