Under the Truth in Lending Act (TILA), lenders are required to disclose which of the following to borrowers?
Correct Answer
B) The Annual Percentage Rate (APR) of the loan
TILA, implemented by Regulation Z, requires lenders to clearly disclose the cost of credit to borrowers, most importantly the Annual Percentage Rate (APR). The APR reflects the true cost of borrowing by including the interest rate plus certain fees and charges, allowing consumers to compare loan offers on an equal basis. TILA does not govern property values, agent commissions, or sale prices.
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Related Topics & Key Terms
Related Topics:
Key Terms:
Related Concepts
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
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