If a buyer wants to purchase a home for $60,000 and the lender appraises it for $58,000, how much will the loan origination fee cost on an 80% loan-to-value loan at 1.5 points?

To determine the amount of the loan origination fee, we first need to establish the loan amount based on an 80% loan-to-value (LTV) ratio on the appraised value of the home. Since the lender appraises the home at $58,000, we calculate 80% of that amount.

The calculation for the loan amount is as follows:

80% of $58,000 = 0.80 × $58,000 = $46,400.

Next, we need to calculate the loan origination fee, which is based on points. A point is equal to 1% of the loan amount. In this case, the loan origination fee is set at 1.5 points. Thus, we find 1.5% of the loan amount as follows:

1.5 points = 1.5% of $46,400,

which can be calculated as:

(1.5 / 100) × $46,400 = 0.015 × $46,400.

This results in:

$696.

Therefore, the loan origination fee at 1.5 points on an 80% loan-to-value loan for the appraised value of $58,000 is $696