What is disclosed according to the federal Truth in Lending law?
Answer:Federal Truth in Lending law is part of the Consumer Credit Protection Act. It seeks to endorse educated consumer credit use through disclosures about costs and terms of loans exceeding $25,000 or using real estate for collateral.
Truth in Lending Disclosures As Per Federal Law
The following items are of greatest importance to consumers:
| Name and Address of Mortgage Company/Creditor | ||
|---|---|---|
| Annual Percentage Rate (APR) | Yearly rate of your credit | ______% |
| Finance Charge | How much the credit will cost? | $______ |
| Amount Financed | Loan amount | $______ |
| Total of Payments | Loan amount + Interest cost | $______ |
| Total Sale Price | Total cost of purchase on credit including down payment of $______ | $______ |
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Amount Financed Itemization Optional |
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Payment Schedule Number of payments, amount of payments, when payments are due |
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Demand Feature Yes/No (Explained) |
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Variable Rate Statement APR may increase, if ______ Interest rate may not increase over ______ If rate increases ______ Effect of interest rate increase ______ |
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Insurance Credit disability insurance and credit life insurance will/will not be purchased separately, or in combination |
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Security The property used as collateral for the mortgage loan |
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Late charge Late payment fee is $______ |
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Prepayment What happens if you pay off early (Penalty charges and terms if you have them) |
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Mortgage Loan Assumption Assumption on conventional loans is not allowed. That is, no one purchasing your house is allowed to take on what is remaining of your mortgage |
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Required Deposit/Earnest Money Deposit money is excluded from the APR |
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Additional Information Nonpayment and default terms; prepayment penalties/refunds. |
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Bear in mind that the abovementioned items do not appear the same way on the TIL settlement statements as they vary among lenders. However, these are the most important items that have to be looked for and used for loan comparison shopping.
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Common misspellings: mortage and morgage