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| Origination Fee Origination FeeOrigination fee charges in mortgages are usually 1% of your loan amount. This origination fee is the fee paid to the company originating your loan to cover their costs associated with creating, processing, and closing your mortgage. Using the lower cost structure of the internet, I have been able to eliminate this origination fee from our fee structure, saving our clients literally thousands of dollars. If your loan is for $200,000 you just saved $2,000. I am frequently asked by clients how we get paid if we are not charging an 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 and by the investor. Email origination fee questions. The origination fee and discount points are both items listed under lender-charges on the HUD-1 Settlement Statement. The origination fee should be located at the top of a "good faith estimate" and must be disclosed within 3 days after applying for a home loan. However, if your loan is for a purchase, at your request, I will show the origination fee on both the Good Faith Estimate and the HUD1 settlement statement. I also will show a Broker Credit of the same amount. IRS has always allowed an origination fee to be deducted from your taxes in the year the transaction occurred, but will now allow the deduction 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 origination fee and discount points and their use to buy down your mortgage interest rate. Read on to learn more about other closing costs in addition to the origination fee I have an article "Buying your home in 2008" by email explaining negotiating strategy in today's market. As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your consumer and mortgage debt is structured today can have a life changing effect in the years to come. Read more about this free, no obligation service. New! View my Wealthbuilder presentation and learn the safe way to manage your debt and fund your retirement. I hope the information on this page was useful to you. Please scroll down to view my Mortgage Market Guide. It is a weekly publication explaining the financial markets from a consumer's perspective that is available on this website or by email subscription. I have nearly 8,000 subscribers today and would be happy to have you as well. Your email address will never be used for any other purpose. |
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