Here’s the thing: APR lumps all your “finance charges” into your interest rate. As you can see from Figure 1, some of your closing costs are considered “finance charges”. APR is calculated by adding all these finance charges to the total interest that you’ll pay over the life of the mortgage, and then calculating an annual interest rate based on that total number.
APR Closing Costs & Prepaid Items (Finance Charges) | Non-APR Closing Costs & Prepaid Items |
Origination Charges and Points | Application Fees |
Processing and Underwriting Fees | Appraisal Fees |
Mortgage Insurance (monthly and upfront) | Credit Report Fees |
Closing Agent Fees Retained by Mortgage Company, or Closing Fees in Excess of What You’d Be Charged if You Paid Cash | Title Fees & Title Insurance |
Tax-related Service Fees | Pest or Flood Hazard Inspection Fees |
Administrative and Wire Transfer Fees | Stamp and Transfer Taxes |
Pre-paid Interest | Pre-paid Escrows for Taxes and Insurance |
#1 – All Seller-Paid Points and Closing Costs Are Excluded from APR
#2 – The APR on an Adjustable Rate Mortgage (ARM) Follows a Different Formula
#3 – The APR Does Not Take Into Account How Long You Will Keep the Mortgage

NMLS Number: 333739 | CA-DBO 333739
CMG Financial | The Beach-Greco Team
Corporate NMLS Number: 1820
info@aundreabeach.com
http://www.ilendlasvegas.com
(702) 326-7866
8337 W. Sunset Road, Suite 300
Las Vegas, Nevada 89113
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