An origination fee is an amount charged by a lender for granting a mortgage. This fee is usually expressed as a percentage of the loan amount. For example, if the loan amount is $300,000 and the origination fee is 0.5%, then the total fee is $1,500 ($300,000 × 0.5%).
Category Archive: Definitions
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Mar
23
What is a buydown point?
When taking out a mortgage, a buydown point is an upfront fee or finance charge that you pay in exchange for getting a lower interest rate on the mortgage. For example, a lender may offer a $200,000 mortgage with an interest rate of 5% without any buydown points. In order to lower the interest rate …
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Mar
23
What is an appraisal fee?
When issuing a mortgage, lenders typically charge borrowers for the cost of getting the property appraised. This is the appraisal fee. In most cases, mortgage lenders require that the property be appraised by a professional appraiser before they will issue a mortgage. Lenders do this to make sure that the property is worth at least …
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Mar
23
What is an application fee?
Mortgage lenders typically charge an application fee when you apply for a mortgage. This helps to cover the costs they incur as they begin to process your application.
Mar
23
What is an appraiser?
An appraiser is a person who estimates the market value of a property. In residential real estate, most appraisers are independent appraisers who are hired by lenders or others to insure that the value of a property is at least as high as the amount of money that the borrower is borrowing. Additionally, there are …
Mar
21
What is an undivided interest?
If you own an undivided interest in a property, that means you own the property with one or more other people, and each of you owns a fractional interest in the entire property. You do not each own a part of the whole property; the property is not physically divided into individual pieces that you …
Mar
21
What is title insurance?
Title insurance is a policy issued by a title insurance company to protect the policy holder from losses due to unknown title defects. Whereas other types of insurance typically insure against future events, title insurance protects the policy holder from things that have happened in the past. For example, auto insurance protects you when your car …
Mar
21
What is a title defect?
A title defect is any fact or circumstance that affects a property owner’s ability to hold or convey complete ownership of property. A lien is an example of a title defect.
Mar
21
What is a title company?
More properly referred to as a title insurance company, a title company issues title insurance to buyers and lenders in a real estate transaction. Through the process of issuing title insurance, title companies often coordinate many aspects of the closing of a real estate transaction. These aspects may include ordering property surveys; coordinating with the …
Mar
21
What does title mean?
Title is the right to ownership of something. Since this blog deals with real estate, title is the right to ownership in land. Just as ownership of a car is proven with a written car title, ownership of real estate is proven by a written deed. However, ownership of real estate may be proven without the …