A loan origination fee is a charge by a lender for processing a new loan application. This fee typically covers the costs of underwriting, processing, and funding the loan. It is usually expressed as a percentage of the total loan amount, often ranging from 0.5% to 1% for mortgages and other types of loans. Borrowers should be aware that loan origination fees can vary between lenders and may be negotiable. Understanding these fees is important for comparing loan offers and determining the overall cost of borrowing. Always review the Loan Estimate provided by lenders for clarity on fees.