Finance
An 'origination fee' charged by a West Virginia mortgage lender is best described as:
AA penalty for late loan payments
BA charge for processing and originating the mortgage loan, typically expressed as a percentage of the loan amount✓ Correct
CA fee paid to the appraiser
DAn insurance premium for PMI
Explanation
An origination fee (also called an origination charge) is charged by the lender for processing and underwriting the loan. It is typically included in the Loan Estimate and Closing Disclosure as part of the borrower's total closing costs.
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Key Terms to Know
Private Mortgage Insurance (PMI)
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
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