verb (used without object), prorated, prorating. 1. to make an arrangement on a basis of proportional distribution. verb (used with object), prorated, prorating. 2. to divide, distribute, or calculate proportionately. Origin of prorate.
Origination charge: The VA allows lenders to charge up to 1 percent of the loan amount to cover origination, processing and underwriting costs. They can choose to either charge you a flat 1 percent origination fee, or pick and choose among a host of fees, so long as they add up to no more than 1 percent.
An origination fee is a fee commonly charged by a lender for processing a loan application. The origination fee may be presented in the form of points or a dollar amount. Each point is equal to 1 percent of the loan amount (e.g. two points on a $100,000 mortgage would cost $2,000).