A fee charged by the lender for processing the mortgage loan, typically 0.5%-1% of the loan amount.
The origination fee is the lender's compensation for evaluating, preparing, and approving your loan. It's separate from third-party fees like appraisals or title insurance.
On a $400,000 loan, expect an origination fee of $2,000-$4,000. Some lenders advertise 'no origination fee' loans but make up for it elsewhere — usually with a slightly higher interest rate.
Origination fees are negotiable, especially when you have strong credit and multiple competing loan offers.