What fees are included in the APR?
The following fees ARE generally included in the APR: Points – both discount points and origination points Pre-paid interest. The interest paid from the date the loan closes to the end of the month. Most mortgage companies assume 15 days of interest in their calculations. However, companies may use any number between 1 and 30! Loan-processing fee Underwriting fee Document-preparation fee Private mortgage-insurance The following fees are SOMETIMES included in the APR: Loan-application fee Credit life insurance (insurance that pays off the mortgage in the event of a borrowers death) The following fees are normally NOT included in the APR: Title or abstract fee Escrow fee Attorney fee Notary fee Document preparation (charged by the closing agent) Home-inspection fees Recording fee Transfer taxes Credit report Appraisal fee Calculating APRs on adjustable and balloon loans is even more complex because future rates are unknown. The result is even more confusion about how lenders calculate AP
