In the same example, what percentage origination fee did Henry agree to pay?

In the same example, what percentage origination fee did Henry agree to pay?

• A. 2%
• B. 0.5%
• C. 1%
• D. 3%

Answer: (C)

Loan origination fees are charges the lender assesses for processing and underwriting a new loan. They’re typically shown as a percentage of the loan amount and are paid at closing. In the example with Henry, the narrative specifies an origination fee of one percent. That amount is within the common range for origination fees and aligns with how lenders often structure this cost, making it the sensible choice given the scenario. Higher percentages, like two or three percent, would push the closing costs up significantly, while a smaller fee like half a percent could occur in some cases but isn’t what the example stated. Remember, the origination fee is a lender charge and is part of the closing costs, separate from points or other fees, and it affects the cash Henry brings to closing. In real practice, you’d verify the exact amount on the Loan Estimate or Closing Disclosure. So Henry agreed to pay one percent origination fee.

Loan origination fees are charges the lender assesses for processing and underwriting a new loan. They’re typically shown as a percentage of the loan amount and are paid at closing. In the example with Henry, the narrative specifies an origination fee of one percent. That amount is within the common range for origination fees and aligns with how lenders often structure this cost, making it the sensible choice given the scenario. Higher percentages, like two or three percent, would push the closing costs up significantly, while a smaller fee like half a percent could occur in some cases but isn’t what the example stated. Remember, the origination fee is a lender charge and is part of the closing costs, separate from points or other fees, and it affects the cash Henry brings to closing. In real practice, you’d verify the exact amount on the Loan Estimate or Closing Disclosure. So Henry agreed to pay one percent origination fee.