Question

A bank charges 1.75 of a point for the origination fee on a mortgage of $400,000. What is the origination fee?

Answer 1

Answer:

The origination fee on a mortgage of $400,000 is $7,000.

Step-by-step explanation:

Here, the mortgage value =  $400,000

The origination fee = 1.75%

Now, the  origination fee is calculated on the amount mortgaged.

⇒ 1.75 % of ($400,00) =  Origination Fee

Now, 1.75 % of ($400,00) = $\frac{1.75}{100} \times 400,000 = 7,000$

or, 1.75 % of ($400,00)  = $ 7,000

Hence, the origination fee on a mortgage of $400,000 is $7,000.