Mortgage Dictionary
Select a term from the dropdown text box. The online mortgage
dictionary will display a definition, plus links to other
related web pages.
Select term:
Origination Fee
The origination fee is an upfront fee that covers loan processing costs.
It is paid to
the lender at the time of closing. Like
discount points, the
origination fee is stated in the form of points.
Thus, if you get
a $100,000 mortgage with a 3-point origination fee, you will need to
pay 3% of the loan (i.e., $3,000) at closing. Since you are
required to pay $3,000 upfront,
you actually only receive $97,000 from the lender.
Unlike discount points, the interest rate on the loan
is not affected by the origination fee.