Loan Origination Fee

The Loan Origination fee in mortgages is usually 1% of your loan amount. This loan origination fee is the fee paid to the company originating your loan to cover their costs associated with creating, processing, and closing your loan. Using the lower cost structure of the internet, I have been able to eliminate the loan origination fee from my fee structure, saving our clients literally thousands of dollars. If your loan is for $200,000 you just saved $2,000 by eliminating the loan origination fee. I am frequently asked by clients how we get paid if we are not charging a loan origination fee. Really, the answer is quite simple. After the loan is closed, we sell the loan to an investor and are paid at that time. Our cost structure is such that we do not need to be paid by both the borrower with a loan origination fee and by the investor. Email me with any question about your loan origination fee

However, if your loan is for a purchase, at your request, I will show the loan origination fee on both the Good Faith Estimate and the HUD1 settlement statement. I also will show a Broker Credit of the same amount as the loan origination fee. IRS has always allowed these fees to be deducted from your taxes in the year the transaction occurred, but will now allow the reduction regardless of who pays for the fee.

In our $200,000 loan scenario, you save $2,000 in fees out of your pocket compared to the average lender but you also get an additional $2,000 deduction this year. Creative? Learn more about loan origination fees and discount points