Select the description that corresponds to an entry in the loan fee pop-up list. Press the down arrow to view a list of loan fee types and corresponding fee codes. The fee code distinguishes the loan fee description and whether the fee point percentage amount will apply to the loan amount as entered or the base loan amount (loan amount less MIP premium financed-FHA loans only). Loan fee types consist of borrower/seller points and borrower/seller discount points. Generally discount points are utilized in FHA/VA transactions only. Most conventional loan fees will consist of point (origination) fees only, while FHA/VA loans will often have origination and discount point fees. In the case of a FHA/VA transaction, point fee computations will be computed based upon the base loan amount. The base loan amount is computed by subtracting any mortgage insurance premiums financed from the loan amount as entered. All discount point fee computations will be computed based on the loan amount as entered.
The origination fee would be computed by multiplying the point figure (1.000) by the base loan amount ($10,000) which would result in a $1,000 origination fee. The borrower discount fee, however, would be computed by multiplying the point figure (1.000) by the loan amount as entered ($10,380) which would result in a $1,038 discount fee. Remember that loan fees that are paid by the borrower are included in the prepaid finance charge and subsequently effect the APR while loan fees that are not paid by the borrower do not affect the prepaid finance charge.