Costs

Origination Fee

An origination fee is what a lender charges to process and underwrite your loan. On your Loan Estimate it shows up under Origination Charges, and it can include points and an underwriting fee. It's one of the costs worth comparing between lenders, since the same loan can carry very different origination charges.

Origination Charges sit at the very top of page 2, in box A. They can bundle a few things together: any points you choose to pay to lower your rate, an underwriting fee, and the lender’s compensation for putting the loan together.

Because these charges vary from lender to lender, box A is one of the best places to compare offers. When you hand me two Loan Estimates, this is among the first lines I’ll line up side by side so you can see who’s actually cheaper, not just who quotes the lowest rate.

Related terms

Closing Costs

Closing costs are the fees you pay to finalize your home purchase, on top of your down payment. They include lender fees, title and escrow charges, an appraisal, and prepaid items like taxes and insurance. Closing costs commonly run roughly 2% to 5% of the purchase price, though it varies by location and loan.

Discount Points

Discount points are an up-front fee you can pay to permanently lower your interest rate. One point usually costs 1% of your loan amount. Points may be worth it if you keep the loan long enough for the monthly savings to outweigh the cost, but not if you'll move or refinance soon.

Underwriting

Underwriting is the behind-the-scenes review where the lender checks that your income, assets, credit, and the property all support the loan. An underwriter verifies your documents and decides whether the loan meets the program's rules. It's the step that turns a pre-approval into a real, final approval, and it's where conditions get cleared.

Last updated: June 13, 2026

This definition is educational and isn't an offer to lend or financial advice. Rates, programs, and guidelines may change without notice. All loans are subject to credit and property approval.

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