What is known as a fee paid to a mortgage loan originator before closing for attempting to find a loan?

The fee paid to a mortgage loan originator before closing for attempting to find a loan is known as an advance fee. This fee is typically collected upfront and is intended to cover the cost of the services provided by the mortgage loan originator in the process of securing a loan for the borrower. It reflects the work and effort the originator puts into sourcing and securing financing before any closing occurs.

In the context of mortgage transactions, advance fees can be significant as they show the commitment of both the borrower and the lender in the loan process. It's essential for borrowers to understand what this fee covers and to ensure that it is appropriate in relation to the services being rendered.

Closing costs are separate expenses incurred when securing a mortgage and are generally paid at the time of closing, not before. A processing fee refers to administrative expenses related to the processing of a loan application but does not specifically relate to the upfront effort to find a loan. Discount points are a form of prepaid interest paid at closing to reduce the overall interest rate of a loan, which also does not align with a fee charged upfront for finding a loan. Thus, the term "advance fee" accurately captures the unique nature of the charge in this case.