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ORIGINATION FEE
An Origination Fee, usually expressed in points, is a fee paid to the lender or its broker to cover sales and administration costs involved in collecting and analyzing the information included in the application package.

In many instances, Loan Officers receive a bonus based upon Origination Fees he/she collects.

These charges are often very negotiable, so plan on expressing displeasure over the origination fee.

DISCOUNT FEE
A Discount Fee is also often expressed in points. Discount fees can be used to buy down interest charges. (Paying more up front to reduce the percentage of interest included in the monthly payment)

FHA / VA POINTS
Finally, FHA / VA loans carry points or fees to cover mortgage insurance.

Since the typical FHA / VA loan involves little or no down payment, these government agencies guarantee payment of a portion of the loan balance should the borrower fail to meet the loan obligations.

Payment of FHA / VA points are usually not negotiable, but negotiating with the property seller over who pays the FHA/VA points is encouraged.

WHAT TO EXPECT
Depending on lender policy and the circumstances of the individual loan, these points may need to be settled at closing, or may be included in the mortgage amount.