Legal Definitions - loan-brokerage fee

A loan-brokerage fee, also known as a mortgage discount or point, is an upfront charge by a lender at a real estate closing for the costs of financing. It is the difference between the mortgage principal and the amount the mortgage actually sells for.

For example, if a borrower takes out a $200,000 mortgage with a 1% loan-brokerage fee, they will have to pay an additional $2,000 at closing. This fee is usually paid by the buyer, but in some cases, it may be paid by the seller.

The loan-brokerage fee is used to cover the costs of originating the loan, such as processing and underwriting fees. It is important to understand this fee when shopping for a mortgage, as it can significantly impact the overall cost of the loan.