What is a “Truth-in-Lending” Statement?
The federal was originally enacted by Congress in 1968 as a part of the Consumer Protection Act. It was subsequently The law was simplified and reformed as a part the Depository Institutions Deregulations and Monetary Control Act in 1980. The law is designed to protect consumers in credit transactions by requiring clear disclosure of key terms of the lending arrangement and all costs. The “Truth in Lending” statement gives you the entire list of all costs you will be required to pay (loan origination fee, discount fees, and prepaid interest and all other items of cost to you), along with the actual figures of the carrying the loan during its lifetime. All of these items are entered into a computer to calculate the true “Annual Percentage Rate (APR). The end result is a statement that shows you the true cost amortized over the term of the mortgage. It is this number that you should use to compare mortgage offerings. One mortgage provider may offer a lower interest rate but higher up-fro
‘Truth in Lending’ is a US federal law that makes it compulsory for lenders to disclose the annual percentage rate (APR) to home buyers shortly after they apply for the loan. It also makes it mandatory for the lender to fully and unambiguously disclose all terms and conditions. The statement in which the lender provides such details is known as the ‘Truth-in-Lending Statement’.
