A property in San Jose, California, sells for $750,000. The buyer obtains a conventional loan for 80% of the purchase price. The lender charges a 1.5% loan origination fee. What is the total loan origination fee the buyer must pay at closing?
Correct Answer
B) $9,000
Step 1: Calculate the loan amount: $750,000 × 80% = $600,000. Step 2: Calculate the origination fee: $600,000 × 1.5% = $9,000. The loan origination fee is calculated on the loan amount, not the purchase price.
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