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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.
The loan origination fee pays for the costs of originating the mortgage. The loan origination fee is simply a cost meant to pay for the research your lender has done on you as a borrower. The loan origination fee is usually about 1 percent of the total home loan, but that can change depending on a number of factors.