What is an Origination Fee on closing costs? Also, what is a Commitment Fee?
An origination fee is what the broker is charging you to do your loan. It’s pretty much a rip-off fee, but almost all mortgage brokers charge it. If you signed a “good faith estimate” when you applied, you probably already agreed to a pre-set origination fee that can’t be negotiated. It should never be more than 1% of your loan amount, or you’re getting screwed. A committment fee is typically charged by the lender, not the mortgage broker. It is just “committing” the loan to the lender. The lender then turns around and sells that to an investor. If you decide to back out and not purchase/refinance your home, often you will still have to pay that fee to the lender.
