What Is a Mortgage Origination Fee?

What Is a Mortgage Origination Fee?

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[cheezybred]

Good question, I was uninformed on this topic.

[NJ-]

Although this does seem high there is far more than cost of loan. The structure needed for the loan means a lot. Also the LO should explain options why the point being used.

[keithowu]

Rachel misspoke at the end, 30 year fixed does not have better interest rate than 15 yr fixed.

[callmegorgeouos]

They always talk about getting a 15-yrs mortgage but how much monthly payment compares to 30-yr; could everyone just pay/get 15-yr??

[insideoutsideupsidedown]

16 years ago, i wished i had locked in a 15 year fixed would be sitting in a free and clear house paying only property tax and insurance.

[xmenify]

All she has to is find the breaking even point and see how long she will save on buying points . If you are doing to stay there the whole term do it other wise don’t and if you don’t have the cash for it don’t do it .

[ordinaryman]

don't get into debt and come back to Dave for reducing debt again.

[pfeiffdog]

You could tell Dave was really happy to get this call and help teach someone the basics of a mortgage

[ninthfloor]

Sell the husbands truck and it’s rice&beans and beans&rice for y’all.

[fmaz]

It's like the banks are trying to make financing as obscure and abstract as possible so people can't understand how expensive something is or compare easilly when shopping.

[DougAlesUSA]

5:20 Rachel keeps thinking to herself; don’t look like I have no idea what they are talking about. 🤔 I know 💡 I will give my head a small nod. Just don’t talk. That’s it, don’t talk. Oh, they want me to talk. I need to say something. “Some people take out a 30 (year loan) to get the better interest rate then the 15.” 🤣🤣🤣 This girl just showed she does not undertand. 30 year loans have higher rates then 15. Rachel. 🤦‍♂️

[SeanBaker]

I understand why they recommend the 15 year, but "life happens" is why you would get the 30 year.

[Izael]

What he didn't ask was, "What is your credit score?" The points may or may not be "fair" depending on her credit score. Assuming a higher score, then, as a lender myself, I would agree that that was a ripoff deal.

[leonardwharris]

You would get a better rate on 15 opposed to a 30.

[irocitZ]

I remember hearing about an origination fee back when I got my mortgage, I didn't know then what it meant. Even now, it's still freaking confusing. Just listening to Dave explain it to the caller who didn't seem like she was getting it either was starting to make my head spin.

[arinbaghermian]

I am a mortgage loan officer and totally cringing at this explanation.

[insideoutsideupsidedown]

Lol, Dave, worth millions, still using a TI-3135....

[LearningFast]

5:23 Rachel says that a 30 year fixed has a better interest rate than a 15 year fixed. Isn't it the other way around?

[LearningFast]

What about the tax benefits of paying a point?

[doctorhorton]

Rachel is correct on the 30 getting a better interest rate than the 15 and was the case for me. Banks make more on a 30 because they get the interest for longer so they give you a better interest to make it more enticing.

Check for yourself using an Amortization calculator (I used credit karma)
loan at 4% for 30 years cost you $171, 870
loan at 4% for 15 years cost you $133, 144

Even if the bank gave you 3.5% instead on a 30 they still get $161, 656

The reason is interest is calculated each month so 180 payment periods on a 15 vs 360 on a 30.

This is also why banks don’t even bring up biweekly payment options unless you ask as they would make less money in interest.