Truth-In-Lending
A federal law requiring disclosure of the Annual Percentage Rate to home buyers shortly after they apply for the loan. Also known as Regulation Z and Truth-In-Lending-Act (TILA).
Requires disclosures about its terms and cost and gives consumers the right to cancel certain credit transactions that involve a lien on a consumer's principal dwelling.
It requires a maximum interest rate to be stated in variable-rate contracts secured by the consumer's dwelling. It imposes limitations on home equity plans and mortgages. The lender must disclose to the borrower the annual percentage rate (APR). The APR reflects the effective yield on a loan including origination fees and discount points. All fees are considered the income of the lender regardless of any costs they are designed to cover.
A policy, issued by a title insurance company, which insures a home buyer against errors in the title search. The cost of the policy is usually a function of the value of the property, and is often borne by the purchaser and/or seller. Policies are also available to protect the lender's interests. |
