Let's assume that you have just taken out a mortgage loan for $200,000 with an origination fee of 2 points due upfront. The mortgage term is 30 years and the mortgage rate is fixed at 4%. What is the cost of the origination fee in dollar terms?

Question

Quizplus · Accepted Answer

One point is equal to 1% of the loan amount. Therefore, 2 points on a $200,000 loan is 2% of $200,000, which equals $4,000.

Let's Assume That You Have Just Taken Out a Mortgage