A Sarasota real estate broker is explaining loan origination fees to first-time homebuyers. All of the following statements about origination fees are correct EXCEPT:
Correct Answer
C) Origination fees are always exactly 1% of the loan amount by Florida law
Correct: Florida law does not mandate origination fees to be exactly 1% - they vary by lender and can range from 0.5% to 2% or more. Why not A: Origination fees are indeed calculated as a percentage of loan amount. Why not B: These fees do compensate lenders for loan processing work. Why not D: Origination fees are typically paid at closing by the borrower.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
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