origination fee

Definition

The charge lenders levy for processing your loan application and creating your mortgage. It's basically an admission fee to the debt party, typically 0.5-1% of the loan amount.

Example Usage

The origination fee was $3,000, which seems excessive for clicking 'approve' on a computer.

Origin

Banking terminology formalized when mortgages became standardized products

Fun Fact

Origination fees are negotiable despite lenders acting like they're carved in stone—everything in real estate is negotiable except property taxes.

Source: Mortgage lending and closing cost terminology

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