Title: Explain loan origination fees and pre-payment penalties.
Course: Real Estate (12154) > Section: Exploring Real Estate Financing

Explanation should include the following definitions:

- Origination fees—transfer fees charged by some lenders to cover the expenses in generating the loan
- Prepayment penalty—a fee that a mortgagor would be required to pay when a loan is paid in full before the maturity date in order to compensate the lender for the unearned portion of the interest

DPOR correlations: 18VAC135-20-400. 6 (Mortgages and deeds of trust); 18VAC135-20-400. 7 (Types of mortgages); 18VAC135-20-400. 14 (Real estate financing)

Process/Skill Questions:

- How are origination fees calculated?
- How is a lender compensated for his/her work?
- How are government loans different from other loans when it comes to prepayment penalties?
- How are prepayment penalties calculated?