What is Truth in Lending ?
Mortgage lenders are required to give you a Truth in Lending (TIL) statement
containing information on the annual percentage rate, the finance charge, the
amount financed, and the total payments required. For adjustable rate loans,
the "total payments" figure is estimated as a "worst case"
scenario. The figure represents the payments you would make if your loan adjusted
upward to the maximum rate allowed by annual and lifetime caps and then stayed
there for the duration of the loan.
The TIL statement may also contain information on security interest, late charges,
prepayment provisions, and whether the mortgage is assumable. If you have an
adjustable rate loan, it may outline the limits on the adjustments (annual and
lifetime caps) and give an example of what your next year's payment might be,
depending on interest rates.