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Mortgage and Real Estate Glossary ~ O

Origination fee

A service fee charged by a lender and broker that the borrower pays on the closing date. All lenders and mortgage brokers charge an origination fee, which can be as mcuh as 2.5% of the loan amount. Online mortgage brokers generally charge much less. Sometimes lenders will refer to this fee in terms of origination points, where 1 point equals 1% of the loan amount. Unlike discount points, you can't deduct the origination fee from your income taxes since it's just a service charge, not interest.
See: Closing Costs

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