An origination fee is a charge by the lender for processing and underwriting your mortgage application. It's typically expressed as a percentage of the loan amount, often around 0.5% to 1%, and is paid at closing as part of your total closing costs. The fee compensates the lender for the administrative work involved in evaluating your application, verifying your finances, and preparing the loan documents. Some lenders offer no-origination-fee loans but offset the cost with a slightly higher interest rate, so it's important to compare the total cost of each option over your expected loan term. Origination fees should be clearly itemized on your Loan Estimate so you can compare offers from multiple lenders.