Prepaid Finance Charges are certain charges made in connection with the loan and which must be paid upon the close of the loan.

These charges affect the APR calculation.  Each line item on the Good Faith Estimate includes a ‘PFC‘ box next to the dollar amount of the item.  All items that are to be included in the APR must be checked ‘PFC’ in order to be included in the APR computation

These charges are defined by the Federal Reserve Board in Regulation Z and the charges must be paid by the borrower.

Fees that are generally included in the APR calculation are points, pre-paid interest, loan processing fees, underwriting fees, document preparation fees, and private mortgage insurance. Please see the attached PDF for items that will affect the APR

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