APR on the Truth in Lending Disclosure Statement

What makes up APR on the Truth in Lending Disclosure Statement?

2 Answers

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:

  1. Application, administration, processing, underwriting and/or funding

  2. Appraisal waiver or inspection waiver fee

  3. Buydown fees (permanent or temporary rate buydowns)

  4. Commitment fees

  5. Courier/fed ex/delivery/phone/printing/storage, e-mail, etc.

  6. Discount points

  7. Document review

  8. Escrow waiver

  9. FHA up-front MIP

  10. Flood Hazard Certification Fee with life of loan tracking

  11. Funding fee

  12. Interest, per diem interest and other charges for the cost of credit

  13. IRS Form 4506 Fee, Request for Taxpayer Information

  14. Handling fees

  15. Life-of-Loan flood cert coverage

  16. Lock-in, lock extension fees

  17. Origination fees

  18. PMI and FHA MIP escrow collections

  19. PMI initial premium

  20. Processing fee

  21. Property inspection waiver

  22. Property inspections and appraisals done after closing (such as on C/P loans)

  23. Recording a corporate assignment of mortgage

  24. Recording service/handling fee

  25. 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)

  26. Underwriting fee

  27. USDA RDA fee

  28. VA Guaranty Fee

  29. Verification fees

  30. Wire fees

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.