What is the total loan origination fee if a house sells for $250,000 and the lender's appraiser values it at $220,000, with an 80% loan ratio and one point charge?

What is the total loan origination fee if a house sells for $250,000 and the lender's appraiser values it at $220,000, with an 80% loan ratio and one point charge?

• A. $2,200
• B. $1,760
• C. $2,400
• D. $3,000

Answer: (B)

To determine the total loan origination fee, we first need to calculate the amount of the loan based on the appraised value of the house and the loan-to-value (LTV) ratio. The house has been appraised at $220,000, and the lender will provide a loan at 80% of that amount. Calculating the loan amount: - Loan amount = Appraised value × Loan ratio - Loan amount = $220,000 × 0.80 = $176,000 Next, we need to calculate the loan origination fee, which is typically charged as a percentage of the loan amount. The question specifies a "one point charge," where one point equals 1% of the loan amount. Calculating the loan origination fee: - Loan origination fee = Loan amount × 1% - Loan origination fee = $176,000 × 0.01 = $1,760 Thus, the total loan origination fee is $1,760. This is why the correct answer is $1,760.

To determine the total loan origination fee, we first need to calculate the amount of the loan based on the appraised value of the house and the loan-to-value (LTV) ratio. The house has been appraised at $220,000, and the lender will provide a loan at 80% of that amount.

Calculating the loan amount:

• Loan amount = Appraised value × Loan ratio

• Loan amount = $220,000 × 0.80 = $176,000

Next, we need to calculate the loan origination fee, which is typically charged as a percentage of the loan amount. The question specifies a "one point charge," where one point equals 1% of the loan amount.

Calculating the loan origination fee:

• Loan origination fee = Loan amount × 1%

• Loan origination fee = $176,000 × 0.01 = $1,760

Thus, the total loan origination fee is $1,760. This is why the correct answer is $1,760.