Application Fees

Application fees are charged to the borrower or consumer to cover the initial costs of the loan approval process. Also called origination fees, they may constitute a fixed amount or range in value from 0.5% to 2% of the total amount borrowed. They are usually paid to a broker or the person handling the loan. Some lenders will credit application fees as discount points, which can be used to lower the interest rates during the loan term. This means that your application fees will be returned to you in the form of interest savings.