Origination Points
Barron's Real Estate Dictionary:
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Origination Points
Charges to a borrower to cover the costs of issuing the loan, such as credit checks, appraisal , and title expenses.
Example: The lender issued a $50,000
mortgage loan and charged a 1% origination fee ($500).
Example: The lender issued a $50,000
mortgage loan and charged a 1% origination fee ($500).
| Originate, Original Face Value | |
| Origination Process, Other People’s Money |
Investopedia Financial Dictionary:
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Origination Points
A type of fee borrowers pay to lenders or loan officers in order to compensate them for the role they play in evaluating, processing and approving mortgage loans. Credit history is one factor that plays a role in the amount of origination points a borrower needs to pay. Unlike the other types of points (for example, discount points), origination points are not tax deductible.
Investopedia Says:
Typically, each single origination point represents 1% of the mortgage loan. For example, if you are borrowing $150,000 and the bank is charging you 1.5 origination points, you will end up paying $2,250 (or 1.5% of $150,000).
Since the amount of origination points required to be paid is not set in stone, borrowers may be able to negotiate the amount of origination points that they pay.
Related Links:
Hidden costs can create what looks like a good deal. Find out how to find the best mortgage possible. Score A Cheap Mortgage
Learn how to pay less for your home in the long run, or save in the short run. Mortgage Points - What's The Point?
It starts with knowing your choices as well as your price range. We show you how to get there. 4 Steps To Attaining A Mortgage
Go beyond interest and find out how mortgage points affect your taxable income. A Tax Primer For Homeowners
Learn the factors to consider when comparing the different programs offered by various lenders. Home-Equity Loans: The Costs
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Barron's Real Estate Dictionary
Dictionary of Real Estate Terms. Copyright © 2008 by Barron's Educational Series, Inc. All rights reserved.
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