Which of the following may NOT be included in the calculation of the Annual Percentage Rate (APR)?

The Annual Percentage Rate (APR) is a comprehensive measure that reflects the total cost of borrowing, including interest rates and associated fees. It gives borrowers a more accurate picture of the true cost of a loan on an annual basis.

Loan origination fees, points, and discount fees are directly related to the costs of obtaining the loan and are included in the APR calculation. These costs affect the effective interest rate that a borrower will pay over the life of the loan.

In contrast, property insurance premiums are not included in the APR calculation. While insurance is a necessary cost associated with obtaining a mortgage, it does not relate directly to the cost of borrowing; rather, it is an ongoing expense that secures the property. Since the APR is intended to provide a clear picture of the cost of the loan itself, insurance premiums are excluded from this calculation. This distinction highlights that the APR focuses on the costs associated specifically with the loan rather than all costs a homeowner may incur during the life of the mortgage.