Don't let your lender confuse you with definitions of certain fees. It's amazing how some loan officers will define such fees, especially when explaining what an origination fee is. In regards to conventional loans, most companies just put their points under discount points. Sometimes you will see a lender place nothing under origination or discount points, but under broker fee. And then you have the FHA origination fee.
Definition: Origination Fee
A fee related to establishing your mortgage. The exact use can be unclear, but the fee ultimately compensates your lender or broker for putting your loan in place. This is from about.com.
In some handbooks that are supposed to be supplied by all lenders to their clients when purchasing or refinancing, the origination fee is defined as a fee covering the lender's administrative costs in processing the loan.
History of the origination fee or the origination point :
Prior to 1983, the origination fees primary explanation from lenders to consumers was for compensation of their services. In the 90's, this basically changed as a fee equal to that of a discount point. A discount point is a certain percentage that is usually paid to lower the rate. 1 point is equal to 1% of the total loan amount. On a $200,000 mortgage, 1 point would be $2,000 in what you would pay in regards to points. Whether or not to pay a point or two is another topic of discussion. For more information on this topic, please read The Myths about ZERO point mortgages instead of paying points upfront.
Another myth is that the lowest rate is always the best deal. This is partially true, but it depends on how much you pay for this rate. Again, read the post, myths about zero point mortgages.
Conclusion : Overall, the best chance to waste your money is to misunderstand these terms. The method of which origination fees are still quoted separately from discount points is because of historical habit. And in some cases, loan officers hoping that borrowers will lose track of the real price of that rate.
When shopping for rates and fees, make sure that you ask for total points being charged. Most of all, smash that question in your head and make sure that you get a good faith estimate and not just a quote over the phone. This is good for several reasons. It will make the lender put it in writing, even though they can change this at any time. And it can sometimes keep them more honest in quoting you rates because they will be putting it in writing. Lastly, it gives you a chance to review all fees that are associated with the loan. Just make sure that you don't shop yourself right out of the market.
For more information on FHA loans, please go to this link. The FHA Expert
For more information on how you can obtain your dream home, please click here : Mortgage Financing Options