Real Estate Agent


An Origination Fee is normally 1% of your loan amount.  For example if you take out a loan for $200,000 your Origination Fee would be $2000.   It is not based on the purchase price.

This fee will cover taking care of documents associated with your loan such as creating, processing and closing your loan. 

Do not confuse this with points they are a different fee all together.  Points are usually associated with paying up front costs to lower your interest rate. 

The government allows you to write off the origination fee in the year that the transaction occurred.  It now will allow you to take this deduction regardless of who paid the fee. This fee will show up on your Good Faith Estimate and the HUD1 Settlement Statement.

You may also have to pay loan origination fees when refinancing your home or taking out a Home Equity Line of Credit or Home Equity Loan.  There are many fees associated with a loan.  Some can be avoided or negotiated.  You may be charged an application fee for applying for a loan which is not usually refundable if you are turned down for the loan.  You may also have to pay for an appraisal fee to ensure that you have enough equity in your home to qualify for these types of loans.  

You should always be aware of all the costs associated with your financing.  Don't ever be afraid to ask questions.  Today the bank or financial institution should provide you with a Good Faith Estimate which covers what fees and costs that will be associated with your loan.  Be sure to read it carefully and if you have questions or concerns address them with your loan officer. 

Be a well-informed consumer.  Do your homework and make an educated decision when choosing your financial institution.


Posted by

Joanne Tilford

Real Living Home Realty

3424 Frederica Street

Owensboro KY  42301


Owensboro KY Rea Estate

Comments (0)