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origination fee
[ aw-rij-uh-ney-shuhn fee, ´Ç-°ůžąÂáâ ]
noun
- a fee charged by a lender for evaluating and processing a loan application, typically a one-time fee taken out up-front as a percentage of the face value of the loan.
yĐÄvlog History and Origins
Origin of origination fee1
Example Sentences
Closing costs typically include an origination fee, home appraisal and title search, among other expenses, and can range from 2% to 6% of the loan amount.
Personal loans donât usually require an application or prepayment fee, but some do come with an origination fee of somewhere between 1% and 10% of your loan amount.
An origination fee to the lender could top out at $6,000, and the lender charges closing fees typical for any mortgage loan.
Factor in the cost of the origination fee and monthly payment to determine whether youâll save money over time.
While the marketing material highlights the low fixed interest rates of the loan, researchers say the loan carries an annual percentage rate of 14.44 percent with a 5 percent origination fee.
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More About Origination Fee
What does origination fee mean in mortgages?
An origination fee is money that a lender charges a borrower for making the loan. It can encompass a number of different fees for processing the application, funding the loan, and other administrative services.
The origination fee can be compared to a commission (âan amount paid to agents, sales representatives, etc., for their servicesâ), and is typically a percentage of the face value of the loan. Itâs a one-time fee, disclosed up-front and collected at the loan closing.
Origination fees are included in the loan APR, the annual rate of interest on the loan.
Examples of origination fee in a sentence
âDepending on the lender, you could pay an origination fee, which is a percentage of the total loan amount included in the amount lent.â
ââWhat Can You Do With A Personal Loan?â . Retrieved March 15, 2020.
âBoth personal loans and home equity loans can charge origination fees, which is what youâll pay to process the loan.â
ââHome Equity Loan Vs. Personal Loan: Which Is Better For You?â . Retrieved March 15, 2020.
âDepending on the lender, you may need to pay a certain amount of money (known as an origination fee) to take out the loan, and possibly another fee if you decided to pay back your loan early (known as a prepayment penalty or fee).â
ââPersonal Loan Vs. Credit Cardâ . Retrieved March 15, 2020.
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