What makes up APR on the Truth in Lending Disclosure Statement?
These are finance charges that are used to compute the APR:
Any fee imposed on the borrower (directly or indirectly) by the lender, broker, settlement agent or title insurer as a condition of obtaining the loan.
Examples of Finance Charges include (but are by no means limited to) the following fees:
Application, administration, processing, underwriting and/or funding
Appraisal waiver or inspection waiver fee
Buydown fees (permanent or temporary rate buydowns)
Courier/fed ex/delivery/phone/printing/storage, e-mail, etc.
FHA up-front MIP
Flood Hazard Certification Fee with life of loan tracking
Interest, per diem interest and other charges for the cost of credit
IRS Form 4506 Fee, Request for Taxpayer Information
Life-of-Loan flood cert coverage
Lock-in, lock extension fees
PMI and FHA MIP escrow collections
PMI initial premium
Property inspection waiver
Property inspections and appraisals done after closing (such as on C/P loans)
Recording a corporate assignment of mortgage
Recording service/handling fee
Settlement agent fees (may be characterized as attorney fees in some areas). Includes the actual settlement fee and all ancillary settlement agent administrative and overhead fees associated with conducting the closing (signing, disbursement and recording)
USDA RDA fee
VA Guaranty Fee
This is an excellent question and anyone attempting to answer it in 600 or so characters, wlll not do a very good job. I just spent four days at an NCLC [National Consumer Law Center] conference. This issue as extensively addressed and I am perhaps as confused as ever on the subject. The best thing you can do is to purchase the Truth in Lending Manual they sell there. It is several hundred pages long but it goes into extensive detail about this subject as it is very, very complicated. When you get into the subject of ARMs that are intexed to the LIBOR rate it becomes an almost unfathomable proposition.