origination fee

n.
A fee, often a percentage of the total principal of a loan, charged by a lender to a borrower on initiation of the loan.

A lender's charge to a borrower, especially for a mortgage loan to cover the costs of issuing the loan, such as the salesman's commission. It may cover a credit check, appraisal, and title expenses. If the fee is a discount point and is only for the use of money, the fee is considered interest and may be deductible (for purchase of a home) or amortizable (for refinancing of a home). See also Points.

This entry contains information applicable to United States law only.

A charge imposed by a lending institution or a bank for the service of processing a loan.

For example, a bank might charge an individual who has applied for a student loan an origination fee of one percent for processing the application and granting the loan.

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The noun has one meaning:

Meaning #1: a fee charged to a borrower (especially for a mortgage loan) to cover the costs of initiating the loan

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