Home Buying Tips – What Is an Origination Fee? How Much Does It Cost?

By Heath Olinger

During the process of buying a home you’re going to encounter more than one fee including an origination fee but the big question is what exactly is this fee and how much does it cost?

About the Origination Fee

In basic terms, an origination fee—sometimes referred to as a discount fee—is money that a lender or bank charges a client to complete a loan transaction. An origination fee can encompass a variety of different fees added together, says Mark Ventrone, owner and broker with ABLEnding, based in California and Arizona. It can include underwriting fees, administrative fees, processing fees, discount fees (also known as points), and any other fee charged by the lender and/or broker to the borrower.

Origination fee vs. points

Lenders generally speak about the money associated with origination fees as points. The term “point” is slang for 1% of the loan amount; 1 point = 1%. And points are part of those aforementioned closing costs charged by your lender, calculated as a percentage of the principal, says Casey Fleming, author of “The Loan Guide: How to Get the Best Possible Mortgage.”

Buy A Home in Dallas Texas

Planning on buying a home in Dallas Texas? If so, contact me Heath Olinger, Realtor® with Rogers Healy and Associates by calling me a (214) 238-8589 or click here to connect with me online.

 

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