What fees are included in the lender's APR calculation?

Question

I'm building a spreadsheet mortgage calculator for my toolkit in excel. It encompasses many variables and can be used for fixed FHA and conventional loans. I'm almost finished with this project but I'm having trouble building a formula for APR as I am unsure what fees it incorporates. I looked at several blogs/websites but their information varies. Any lenders or smart professionals out there who could clarify what fees are included and excluded in an APR formula for mortgages.

Chris Mason · Answer

Take all the junk fees that wouldn't exist but for there being a mortgage, add them up, divide by 360, add that number to your monthly payment, and back into your APR.

I've done it like twice to make sure it wasn't witchcraft.

It serves limited function because it is applied very inconsistently across types of credit. For example if I charged you 3% of loan amount up-front, that would be an APR fee (and you might shoot me). But when a credit card company charges 3% of loan amount as a "balance transfer fee" up-front, that is not an APR fee - hence them advertising "0% APR for 18 months!"

Krystian Sosinski · Answer

Per the Truth In Lending Act, these are the guidelines for finance charges that are considered for APR calculations.

Krystian Sosinski · Answer

Here are the different closing costs I'm working with for reference....Lender FeesLoan OriginationPointsCredit ReportFlood DeterminationTax ServiceAppraisalThird Party FeesBuyer's Attorney FeeLender's Attorney FeeSurvey FeeEscrow FeeTitle InsuranceTitle SearchRecording FeeCourier FeePre-paid Interest (10 days)Property Tax (3 months)Homeowners Insurance (3 months)1st year Insurance PremiumOtherUp Front Premium Rate (FHA)Annual Premium Rate