Which fee is typically associated with the cost of obtaining a mortgage loan from the lender?

The fee typically associated with the cost of obtaining a mortgage loan from the lender is points. Points, also known as discount points, are upfront fees paid to the lender at closing in exchange for a lower interest rate on the mortgage. Each point generally represents one percent of the loan amount, and paying points can help borrowers save money on interest over the life of the loan, making it a strategic financial decision for many homebuyers.

In contrast, title insurance is a separate fee that protects against potential issues with the property's title and is not directly related to securing the mortgage itself. A home warranty is a service contract that covers repair or replacement costs for home systems and appliances, while prorated charges typically refer to costs that are divided among parties based on usage, such as property taxes or homeowners association fees, rather than being specific to mortgage loan costs. Understanding these distinctions helps clarify the primary financial obligations involved in obtaining a mortgage.