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If these fees are insignificant they can be expensed at the time incurred. On larger loans these fees can be materially significant. In these cases, the origination fees associated with the loan can be capitalized and amortized over the life of the loan.
Loan origination fees, also known as points, are not a necessary expense when obtaining a mortgage. These fees are a way for a lender or broker to make money from closing the loan. By shopping around, you can find the best rate and the lowest origination fees. Origination fees are not necessarily a bad thing. The lender or broker is going to charge you in some way in order for the loan officer to make money off of the deal. A loan origination fee is a negotiable payment that you pay in cash at closing. Often, the loan origination fee gives you a better interest rate.