What is a mortgage origination fee?

An origination fee is a charge assessed by the lender to cover the costs of processing, evaluating, and underwriting your mortgage application. It compensates the lender for the administrative work involved in bringing your loan to closing. Origination fees are typically expressed as a percentage of the loan amount — often around 0.5% to 1% — though they vary by lender and loan type, and some lenders market no origination fee products that may offset costs in other ways.

Origination fees are included in the APR calculation and will appear on your Loan Estimate and Closing Disclosure, making them easier to compare across lenders. For buyers financing homes in Delaware, Ulster, Greene, and Otsego counties, shopping multiple lenders — including local community banks, credit unions, and regional mortgage lenders familiar with rural Catskill properties — is worthwhile. Local lenders may have more flexibility on fees and greater experience handling the particular requirements of rural New York properties, from well and septic requirements to large-acreage appraisals.