Which fee is typically charged by lenders at closing as a percentage of the loan amount?

The origination fee is typically charged by lenders at closing as a percentage of the loan amount. This fee compensates the lender for the work involved in evaluating, preparing, and submitting a mortgage loan. It is commonly set as a percentage of the total loan amount—often ranging from 0.5% to 1.0%—and is considered a standard part of the closing costs that the borrower must pay.

While discount points can also be associated with the loan closing process, they primarily serve to adjust the interest rate on a loan rather than acting as a straightforward percentage fee for processing the loan. Underwriting fees and processing fees, on the other hand, are typically more fixed charges related to specific services involved in evaluating and preparing the loan, rather than being calculated as a percentage of the loan amount. Thus, the origination fee stands out as the correct answer in the context of percentage-based charges applied to the loan at closing.