What Does Mortgage APR Include?
The following fees ARE generally included in the APR:
- Points- both discount points and origination points. 1 point equals 1% of the loan amount. Sometimes a lender will use origination as a single charge rather than charge an admin fee, processing fee, underwriting fee etc. which is essentially the same as each of these departments have its own personnel.
- Pre-paid interest- The interest paid from the date the loan closes to the end of the month. Example: If you close on August 10th, you will pay 21 days of pre-paid interest by the end of the month.
- Admin Fee
- Loan-processing fee-
- Underwriting fee-
- Document-preparation fee-
- Private mortgage-insurance
- Escrow/Settlement fee
The following fees are SOMETIMES included in the APR (check your compliance department for these ones):
- Loan-application fee
- Credit life insurance (insurance that pays off the mortgage in the event of a borrower’s death)
The following fees are normally NOT included in the APR:
- Title or abstract fee
- Attorney fee
- Notary fee
- Document preparation (charged by the closing agent)
- Home-inspection fees
- Recording fee
- Transfer taxes
- Credit report
- Appraisal fee