Origination fee: The fee the lender may charge the borrower to do the loan. Usually the origination fee is quoted in points of the loan amount (1 point=1%). The fee is part of the borrower’s closing costs. It is important to compare this fee when shopping for a mortgage and comparing lenders.
Discount points: The fee associated with “buying down the rate,” which means you want a lower interest rate and are willing to pay a fee to obtain it. The term “discount” is misleading because, as part of your closing costs, you actually pay to receive the discount. But with a lower interest rate, you will then save on your monthly payments and over the life of the loan.
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