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A borrower takes out a $200,000 conventional loan. The lender charges an origination fee of 1% and the borrower also pays 0.5 discount points. What is the total cost of fees in dollars?

Loan Origination Activities · 27% of the SAFE exameasy

$3,000 $2,500 $1,000 $2,000

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Correct answer: $3,000

Origination fee = 1% x $200,000 = $2,000. Discount points = 0.5% x $200,000 = $1,000. Total = $2,000 + $1,000 = $3,000. Both origination fees and discount points are calculated as a percentage of the loan amount.