Which of the following would be used in calculating APR?

The annual percentage rate (APR) is a crucial metric that provides borrowers with a clearer understanding of the true cost of borrowing over the term of a loan. It includes not only the interest rate but also other costs and fees associated with obtaining a mortgage. The correct choice related to calculating the APR is the mortgage insurance premium (MIP).

MIP is often required on certain types of loans, particularly those insured by the Federal Housing Administration (FHA). It represents an additional cost that borrowers must pay on top of the principal and interest, which directly impacts the overall cost of borrowing. By including MIP in the APR calculation, the lender gives a more accurate reflection of the total borrowing costs over the loan's life, enabling borrowers to make informed comparisons between different loan options.

The other options do not contribute to the calculation of APR in the same way. For instance, mortgage commission may be part of the overall closing costs but is not typically included in the APR. Real estate commissions are associated with property sales, not borrowing, and tax proration relates to property taxes owed, which also falls outside the scope of APR calculations. Hence, incorporating MIP is fundamental to arriving at an APR that signifies the complete cost of the mortgage loan.