Origination Point [Mortgage] Law and Legal Definition

When used in the context of mortgages and loans, the term ‘origination point’ means a kind of fee that borrowers pay to lenders or loan officers when taking out a loan. Such points are common in mortgage and real estate industry.

These points, or fees, are paid to the bank or lending institution to compensate 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. Origination points are not tax deductible.

All loans do not require origination points. Some mortgage loans do not require origination points at all. On the other hand, there are loans where several points may be charged.