What is the purpose of truth-in-lending disclosures?

What is the purpose of truth-in-lending disclosures?

• A. To inform the lender of the borrower's financial status
• B. To outline the terms and costs of the mortgage loan
• C. To summarize the closing process
• D. To interpret local real estate laws

Answer: (B)

The primary purpose of truth-in-lending disclosures is to outline the terms and costs of the mortgage loan. These disclosures are designed to provide borrowers with clear, concise information regarding the cost of credit, including the annual percentage rate (APR), the total finance charges, and the total amount financed. This transparency helps borrowers understand the full financial implications of their mortgage agreements, enabling them to make informed decisions regarding their loans. By having a clear understanding of all terms, including the payment schedule and applicable fees, borrowers can compare different loan offers and choose the one that best fits their needs.

The primary purpose of truth-in-lending disclosures is to outline the terms and costs of the mortgage loan. These disclosures are designed to provide borrowers with clear, concise information regarding the cost of credit, including the annual percentage rate (APR), the total finance charges, and the total amount financed. This transparency helps borrowers understand the full financial implications of their mortgage agreements, enabling them to make informed decisions regarding their loans. By having a clear understanding of all terms, including the payment schedule and applicable fees, borrowers can compare different loan offers and choose the one that best fits their needs.