According to a study made by Mortgage Bankers Association (MBA) in 2017, the cost to originating a loan was about $8,887 per loan at that time, while the number was only $5,985 in 2008. Now it’s even higher. The main reason that the cost is high is regulation has made the origination process more complex and loan originators (brokers and lenders) have to do more work and spend more time. The high cost is also due to higher expenses, such as commissions, compensation, equipment and other company expenses.
Comparing to the whole cost, the portion that a borrower pays for loan origination is a very limited amount, for most no-point charge loans. Loan origination fee charge varies from one company to another and there’s no fixed amount. Some lenders just list it as Loan Origination Fee, while the others may list it as a total of Underwriting Fee, Processing Fee, Admin Fee and etc.
To read the full post concerning loan cost, please click here.
