What fees may Residential Mortgage Lenders accept from borrowers without disclosing?

The annual percentage rate (APR) is a measure that reflects the total cost of borrowing over the life of a loan, expressed as a percentage. It includes not just the interest rate but also points, mortgage insurance, and other fees that a borrower may incur.

In the context of New Jersey's Residential Mortgage Lending Act, lenders must disclose all significant costs associated with borrowing, including certain fees, to ensure that borrowers fully understand the terms of their loans. However, the APR itself does not require separate disclosure of fees in the same way that specific fees like processing or origination fees do.

This distinction is important because while lenders must be transparent about the components that contribute to the APR, they can accept the calculation of the APR as an all-inclusive measure without needing to itemize those same components to the borrowers, as long as the APR is disclosed properly. Therefore, lenders can accept certain fees without individual disclosure, as they are factored into the overall APR that is presented to the borrower.

Understanding this nuanced aspect of mortgage lending regulations can help borrowers critically evaluate loan offers and comprehend the actual costs, as represented by the APR, without the need for itemized disclosure of each fee contributing to that calculation.