Question

A bank charges 1.75 of a point for the origination fee on a mortgage of $400,000. What is the origination fee?

Answer 1

The origination fee on a mortgage of $400,000 is $7,000.

Explanation:

Here, the mortgage value = $400,000

The origination fee = 1.75%

Now, the origination fee is calculated on the amount mortgaged.

⇒ 1.75 % of ($400,00) = Origination Fee

Now, 1.75 % of ($400,00) =
`(1.75)/(100)  * 400,000 = 7,000`

or, 1.75 % of ($400,00) = $ 7,000

Hence, the origination fee on a mortgage of $400,000 is $7,000.