Which item is NOT included in the calculation of the annual percentage rate?

The annual percentage rate (APR) is a critical measure that reflects the true cost of borrowing by encompassing not only the interest rate but also various fees and charges associated with obtaining a mortgage. It is designed to give borrowers a more comprehensive understanding of the costs they will incur over the life of the loan.

In this context, title insurance premium is not included in the calculation of APR. Title insurance is a one-time fee that protects against potential defects in the title and does not affect the cost of borrowing over time. Since APR focuses on the interest and cost of borrowing, one-time fees like title insurance do not factor into this rate.

On the other hand, elements such as mortgage insurance premiums, broker's origination fees, and lender's discount points are all associated with the cost of obtaining a loan and directly impact the total cost to the borrower over the duration of the loan. Therefore, these items are included in the APR calculation, as they contribute to the overall expense incurred from taking out a mortgage.

This distinction helps borrowers make informed comparisons between different loan offers, focusing specifically on the recurring costs associated with financing rather than incidental charges.