A borrower receives a Loan Estimate for a fixed-rate mortgage with a loan amount of $300,000, an interest rate of 4.5%, and total loan costs of $6,000. What must be included in the finance charge calculation under TILA?
Correct Answer
B) Interest, loan origination fees, and mortgage broker fees
Under TILA/Regulation Z, the finance charge includes interest and certain fees such as loan origination fees, mortgage broker fees, and other charges imposed by the creditor as an incident to credit. It does not include all closing costs like title insurance or appraisal fees unless they are imposed by the creditor.
Why This Is the Correct Answer
Under TILA/Regulation Z, the finance charge includes interest and certain fees such as loan origination fees, mortgage broker fees, and other charges imposed by the creditor as an incident to credit. It does not include all closing costs like title insurance or appraisal fees unless they are imposed by the creditor.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
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