The APR factors in the effects of all of the following expenses except which one?

The Annual Percentage Rate (APR) is designed to reflect the total cost of borrowing over the life of a loan, including not just the interest rate but also various fees and costs associated with securing that loan. It is an important tool for borrowers to compare the cost of different loans, as it incorporates fees like processing fees, origination fees, and mortgage insurance premiums into the overall cost of borrowing.

In this context, hazard insurance premiums are not included in the APR calculation. This is because hazard insurance is considered a separate cost that protects the property itself rather than a cost of borrowing from the lender. The lender does not typically require the borrower to purchase hazard insurance as a part of the loan agreement, so it does not directly affect the cost associated with the lending itself.

On the other hand, the processing fee, origination fee, and mortgage insurance premium are all directly related to the loan and how the lender processes and secures the mortgage. These costs contribute to the overall expense of taking out the loan and thus are included in the APR, which aims to give a comprehensive view of the borrower's financial obligations when financing a home.