Question 1

What is an origination fee on a loan?

Accepted Answer

[An origination fee ](https://www.bluerate.ai/blog/mortgage-loan-origination-fee)covers the lender's cost to process a loan. It is often a percentage of the loan amount (commonly around **0.5%–1%**) but varies by lender. Some lenders offset fees with higher rates.

Question 2

What are loan points?

Accepted Answer

A point equals **1% of the loan amount**. Points can be: - **Origination points** — fees paid to cover processing.  - **Discount points** — prepaid interest you buy to lower the rate. Each discount point typically reduces the interest rate by an amount set by the lender. Calculate the break-even time to see if points make sense.

Question 3

How does a mortgage work?

Accepted Answer

A mortgage is a secured loan using the home as collateral. Monthly payments combine interest and principal. Over time, the loan balance falls and equity grows. If you stop paying, the lender can foreclose.

Question 4

What is another name for a loan officer?

Accepted Answer

Common titles: **[Mortgage Loan Officer (MLO)](https://www.bluerate.ai/blog/what-is-a-mortgage-loan-originator)**, **Loan Originator**, **Mortgage Consultant**. A **mortgage broker** is a different role that shops multiple lenders.

Question 5

What is the difference between a loan originator, a loan officer, and a lender?

Accepted Answer

- **Loan originator / loan officer:** The person who starts and processes the loan application.  - **Underwriter:** The person or team that reviews and approves or denies the loan.  - **Lender:** The bank or company that funds the loan. A loan officer works for or with a lender or broker.

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