Truth In Lending (TIL)
Definition of "Truth in Lending (TIL)"
The federal law that specifies the information that must be provided to borrowers on different types of loans. Also, the form used to disclose this information. Truth in Lending (TIL) is a great idea, in principle. The idea is to require lenders to provide one uniform set of price disclosures that are consistent from loan to loan and from lender to lender. Then consumers can make apples-to-apples price comparisons across loan types and across lenders. The idea has worked concerning the methodology used to calculate interest cost. Borrowers no longer have to contend with non-comparable ways to calculate interest: discount rates, add-on rates, and internal rates of return. APR: The internal rate of return used to measure interest cost on a mortgage is called the annual percentage rate, or APR. The APR on a mortgage is misleading because upfront fees are a major cost, yet only some of them are included in the APR. In addition, the APR assumes all loans run to term, when in fact most mortgages are paid in full well before term. Subordination Policy on Second Mortgages: Very few borrowers who take out a second mortgage are aware that the second mortgage lender can prevent them from refinancing their first mortgage. When the existing first mortgage is repaid, the existing second mortgage automatically becomes the first mortgage unless the second mortgage lender is willing to subordinate his claim to that of the lender providing the new mortgage into which the borrower is refinancing.
Popular Mortgage Terms
On an ARM, the assumption that the value of the index to which the interest rate is tied does not change from its initial level. ...
A borrower who doesn't pay. ...
The dollar amount of interest paid each month. The interest payment is the same as interest due so long as the scheduled mortgage payment is equal to or greater than the interest due. ...
A second mortgage offered at preferential (subsidized) terms to those who qualify. For example, a labor union may offer members who are first-time home buyers a silent second to finance ...
A request for a loan that includes the information about the potential borrower, the property and the requested loan that the solicited lender needs to make a decision. In a narrower sense, ...
The definition of affordability in real estate is simply a buyer’s capacity to afford a house. Affordability is usually expressed in terms of the maximum amount a buyer will be able ...
A mortgage on which half the monthly payment is paid twice a month. It should be called a 'semi-monthly mortgage' but market practice often trumps logic. In contrast to a biweekly, a ...
A loan eligible for purchase by the two major federal agencies that buy mortgages, Fannie Mae and Freddie Mac. Conforming mortgages cannot exceed a legal maximum amount, which was $322,700 ...
A particular computerized system for doing automated underwriting. Mortgage insurers and some large lenders have developed such systems, but the most widely used are Fannie Mae's 'Desktop ...
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