Your buyer client, Max, just signed a purchase agreement for a $520,000 home with a 60% LTV ratio. What loan origination fee can Max expect to pay at closing if his lender charges a 1.5% fee?

To determine the loan origination fee that Max can expect to pay at closing, we first need to calculate the loan amount based on the home's purchase price and the loan-to-value (LTV) ratio.

The LTV ratio indicates what portion of the property’s value is being financed through a mortgage. In this case, with a purchase price of $520,000 and an LTV ratio of 60%, we can calculate the loan amount as follows:

Loan Amount = Purchase Price x LTV Ratio

Loan Amount = $520,000 x 60%

Loan Amount = $520,000 x 0.60

Loan Amount = $312,000

Now that we have the loan amount, we can calculate the loan origination fee. The lender charges a 1.5% fee on the loan amount.

Loan Origination Fee = Loan Amount x Origination Fee Percentage

Loan Origination Fee = $312,000 x 1.5%

Loan Origination Fee = $312,000 x 0.015

Loan Origination Fee = $4,680

Thus, Max can expect to pay a loan origination fee of $4,680 at closing. This amount is directly tied to the loan amount and the