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Origination fee is a fee charged by a lender for processing a new loan application. It is typically a percentage of the loan amount and covers the costs associated with evaluating, underwriting, and approving the loan.
Let's say you're applying for a mortgage to buy a new house. The lender charges you an origination fee of 1% of the loan amount, which is $2,000. This fee covers the lender's costs of processing your loan application, including credit checks, documentation etc.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
Origination fee, oh can't you see,
Is a fee charged by a lender, just like a bee.
It's a small percentage of your loan amount,
To process your application, they do account.
They check your credit, your income too,
And make sure your house is worth its due.
So when you're buying a home, and need a loan,
Origination fee, you'll surely know