Which of the following fees is excluded from the calculation of the annual percentage rate according to the Truth-in-Lending Act (TILA)?

Hazard insurance is excluded from the calculation of the annual percentage rate (APR) according to the Truth-in-Lending Act (TILA) because it is considered an insurance premium that protects the property and benefits the borrower rather than directly impacting the cost of the loan itself. TILA aims to provide consumers with a clear understanding of the costs associated with borrowing, and therefore, it specifies which fees should be included in the APR calculation to reflect the true cost of the loan.

Hazard insurance can vary greatly based on the property and the homeowner’s choices, and lenders do not have control over this fee. By excluding it, TILA helps maintain a more consistent and comparable APR among lenders. This allows borrowers to make informed choices without the influence of insurance costs that can differ widely for individual circumstances.

In contrast, wire transfer fees, prepaid interest, and mortgage insurance premiums are typically included in the APR calculation as they directly relate to the cost of obtaining the loan. These charges impact the borrower's financial obligation and must be considered in a comprehensive assessment of the loan's overall cost.