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