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What is Annual Percentage Rate?

The APR or Annual Percentage Rate calculation was created to measure the "true cost" of a loan, a single number enabling borrowers to comparison shop among different lenders offering various note rate/loan fee combinations.

APR or Annual Percentage Rate is based on, or consists of: interest charges, mortgage insurance premiums and the fees charged in connection with making the loan. These are expressed as a percentage of the amount financed.

The specific fees included in the APR calculation make up the "Prepaid Finances Charges" or "APR Fees." These fees also enable the calculation of the "Amount Financed" and "Total Finance Charge" figures which appears on the Truth-In-Lending Statement (TIL).

In simple terms, APR Fees include fees paid in connection with obtaining the loan. Fees that might be paid in a comparable "all cash" transaction generally are not considered APR Fees.

Lenders often disagree in their interpretations about which fees are APR Fees and which are not. Under Regulation Z, secondary market purchasers of closed loans assume liability for APR and Total Finance Charge errors committed by the originator of a loan. For this reason, the lender will typically rely on its own interpretation of APR Fees, and will decline to purchase or originate loans which it feels violate these provisions of the Truth-In-Lending Act.

View our APR Fee chart for a comprehensive list of fees that might be charged in a loan transaction. An 'x' mark appears in the column labeled "APR Fees" if the fee is one that Associate Mortgage's lenders generally consider to be a Prepaid Finance Charge.

Paid Out Side of Closing or Prepaid (POC) :

Is paid by the borrower. For example, typically, the appraisal fee is paid to the appraiser when they arrive to perform the property inspection. The credit report is also paid by the borrowers at the time it is ordered.

APR Fees

This list includes fees commonly charged at or before closing. If you see that a particular fee not listed here, please contact a representative of Associate Mortgage for a determination of whether it is considered in determining your APR or Annual Percentage Rate. For more information on Regulation Z, click here....

Fee Description	APR Fee
Lender Origination Fee	x
Loan Discount Fee	x
Appraisal Fee	POC
Credit Report Fee	POC
Inspection Fee (one time inspection -- excludes construction inspections)
Broker's Origination Fee	x
Broker Loan Discount Fee	x
Tax Service Fee	x
Flood Determination Fee (without life-of-loan coverage)
Life Of Loan Coverage Flood Fee (or combination of flood determination and life-of-loan coverage)	x
Lender/Broker Underwriting Fee	x
Processing Fee	x
Courier Fee	x
Lender Courier Fee	x
442 Recertification Fee
Mortgage Insurance Premium and Impound Cushion	x
Administrative Fee	x
Application Fee
Commitment Fee	x
Escrow/Closing Agent/Closing Attorney Fee	x
Title Search/Abstract Fee
Title Exam/Survey Fee
Title Binder Fee
Document Preparation Fee **
Redraw Fee
Notary Fee
Lender's Attorney Fee	x
Title Policy Premium Fee
Loan Tie-In	x
Sub Escrow By Title Company To Pay Off Existing Liens On Loan	x
Co-Op Lien Search Fee
Title Endorsement Fees
Fax Fee By Title Company	x
Courier, Email and/or Copy Fee By Title Company	x
Mortgage Tax
Recording Fees
City/County Tax/Stamps
State Tax/Stamps
Intangible Tax
Survey Fee
Pest Inspection Fee
Consolidation Prep Fee
Wire Transfer Fee (regardless of who charges it)	x
Signing Fee	x
Non-Closing Attorney Fee (retained by borrower)

 

Page Updated: 07/31/2007