how does a bank determine a credit for orgination fees in Harp program

The lender credit will be different depending on which lender your going with... most lenders "Cost of Money" is about the same, but what they sell that money for can be vastly different.. the credit offered by the lender is usually there because you selected a higher than "PAR" rate.. by selecting a higher rate, the lender is selling you money at a higher cost, which will net them a higher profit when the loan is sold, so they are able to pay themselves and offer you a credit towards your costs with this additional profit.. If your trying to find out how to know the actual cost of money is for your lender, it's near impossible without being in the industry.. .. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

If you are trying to figure out how the bank determines how much of the closing costs they are going to credit you with (so you don't have to pay them), every bank is going to do the figures differently, not only because they are all working from different number to start with, but the policies of the bank aregoing to be affecting things as well. Some banks may charge the borrower "no fees" and raise the rate a bit; others may only include 3rd party costs,and not be charging for their internal processing. Multiple other scenarios also.

Every lender may be different.

All lenders charge origination. It is how you pay it that varies. Everyday, as rates change, the amount of additional cost or how much credit is given for the particular rate selected can change. But the answer is what rate and what cost works best for you. Here is a link to a picture that gives you a good example of interest rate versus closing costs. It is not current rates, and I don't lend in TX - but it should help to understand. http://joemetzler.com/rate_quote_sample.jpg