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Complete glossary lessonNational exam concept

Loan origination fee

A loan origination fee is a charge for the lender's work in making, processing, or underwriting a loan.

Official area

Financing

Knowledge cluster

Mortgage finance

Learning sequence

Define, distinguish, apply, retrieve

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Exam purpose

Recognize the rule, then reject the nearest look-alike.

Georgia lens

Apply the state distinction only when the facts call for it.

Connected terms

Connected to 4 terms and one official content area.

What does Loan origination fee mean in real estate?

A loan origination fee is a charge for the lender's work in making, processing, or underwriting a loan. When quoted as points, one point equals 1 percent of the loan amount.

How is Loan origination fee different from the closest exam answer?

An origination fee compensates the lender for origination services. Discount points are prepaid interest commonly exchanged for a lower rate.

What is the Georgia-specific rule?

The national formula applies in Georgia. Both fees may appear on federal loan disclosures, and both are calculated from the loan when stated as points.

Worked exam example

Scenario

A 1.25-point origination fee on a $320,000 loan is $320,000 × 0.0125 = $4,000.

Decision rule

An origination fee compensates the lender for origination services. Discount points are prepaid interest commonly exchanged for a lower rate.

What is the most common exam trap?

Trap correction

Do not use the sales price or assume every point shown is a discount point.

Memory cue: Do not use the sales price or assume every point shown is a discount point.

Original exam check

Apply the definition

Which statement correctly explains Loan origination fee?

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Recommended next complete lesson

Continue with Financing complete lesson. It places this term inside the full rule, worked examples, exam traps, and mixed practice required for mastery.

Loan origination fee quick answers

Facts checked against the current PSI Candidate Information Bulletin and GREC sources. Editorial standards.

What is Loan origination fee?

A loan origination fee is a charge for the lender's work in making, processing, or underwriting a loan.

What is Loan origination fee commonly confused with?

An origination fee compensates the lender for origination services. Discount points are prepaid interest commonly exchanged for a lower rate.

How does Georgia treat Loan origination fee?

The national formula applies in Georgia. Both fees may appear on federal loan disclosures, and both are calculated from the loan when stated as points.