An origination fee, also known as an origination charge or points, is a fee charged by a lender for processing and approving a loan. It is typically expressed as a percentage of the total loan amount, with one point being equal to 1% of the loan value. The fee covers the costs incurred by the lender during the underwriting process, such as credit checks, appraisals, and other administrative tasks associated with approving and setting up a new loan. Origination fees are usually paid at closing and can be added into the overall cost of the loan or treated as a separate charge.