Which activity is NOT typically included in finance charges that affect APR?

The activity that is not typically included in finance charges that affect the Annual Percentage Rate (APR) is hazard insurance premiums. APR is designed to provide borrowers with a clear understanding of the total cost of borrowing over the life of the loan, encompassing various fees and charges that are directly related to obtaining the credit, such as loan fees, points, and interest rates.

Hazard insurance premiums, while they are an essential component of protecting the property, are considered recurring costs that are separate from the costs of obtaining the loan itself. These premiums are typically not involved in the calculation of APR because they do not directly relate to the financing of the loan. Instead, they are required to protect the lender's interest in the property. Understanding this distinction is crucial for borrowers to assess the true cost of borrowing accurately when evaluating their loan options.