10
Finance Charge Chart
FINANCE CHARGE = DOLLAR COST OF CONSUMER CREDIT: It includes any charge payable directly or indirectly by
the consumer and imposed directly or indirectly by the creditor as a condition of or incident to the extension of credit.
CHARGES ALWAYS
INCLUDED
CHARGES INCLUDED
UNLESS CONDITIONS
ARE MET
CONDITIONS
(Any loan)
CHARGES NOT
INCLUDED
(Residential mortgage
transactions and loans secured
by real estate)
CHARGES NEVER
INCLUDED
Charges payable in a comparable
cash transaction.
Fees for unanticipated late
payments
Overdraft fees not agreed to in
writing
Seller’s points
Participation or membership fees
Discount offered by the seller to
induce payment by cash or other
means not involving the use of a
credit card
Interest forfeited as a result of
interest reduction required by law
Charges absorbed by the creditor as
a cost of doing business
Interest
Transaction fees
Loan origination fees
Consumer points
Credit guarantee insurance
premiums
Charges imposed on the creditor for
purchasing the loan, which are
passed on to the consumer
Discounts for inducing payment by
means other than credit
Mortgage broker fees
Other examples: Fee for preparing
TILA disclosures; real estate
construction loan inspection fees;
fees for post-consummation tax or
flood service policy; required credit
life insurance charges
Premiums for credit life, A&H, or
loss of income insurance
Debt cancellation fees
Premiums for property or liability
insurance
Premiums for vendor’s single
interest (VSI) insurance
Security interest charges (filing
fees), insurance in lieu of filing fees
and certain notary fees
Charges imposed by third parties
Charges imposed by third party
closing agents
Appraisal and credit report fees
Insurance not required, disclosures
are made, and consumer authorizes
Coverage not required, disclosures
are made, and consumer authorizes
Consumer selects insurance
company and disclosures are made
Insurer waives right of subrogation,
consumer selects insurance
company, and disclosures are made
The fee is for lien purposes,
prescribed by law, payable to a third
public official and is itemized and
disclosed
Use of the third party is not required
to obtain loan and creditor does not
retain the charge
Creditor does not require and does
not retain the fee for the particular
service
Application fees, if charged to all
applicants, are not finance charges.
Application fees may include
appraisal or credit report fees.
Fees for title insurance, title examination,
property survey, etc.
Fees for preparing loan documents,
mortgages, and other settlement documents
Amounts required to be paid into escrow, if
not otherwise included in the finance
charge
Notary fees
Pre-consummation flood and pest
inspection fees
Appraisal and credit report fees