Mortgage Glossary
Truth in Lending Act
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
The Truth in Lending Act is a federal law that requires lenders to disclose the full cost of credit, including the APR, finance charges, and total payments, so borrowers can compare offers.
What Truth in Lending Act means
Passed in 1968, TILA standardized how lenders present loan costs and gave borrowers protections like the right of rescission on refinances. Its disclosures now flow through the Loan Estimate and Closing Disclosure under TRID.
Florida example
Under TILA, a Florida lender disclosed a 6.78% APR on a loan with a 6.5% note rate, showing the buyer how points and fees raised the true borrowing cost.
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