Truth in Lending Act Levels Playing Field For Mortgage Seekers

Allison Beatty
LoanBiz Columnist


If you're in the market for a California mortgage, you'll want to pay special attention to the financial disclosures. Luckily, the total amount of the loan, the interest rate, and other details are easier to understand today, thanks to the federal Truth in Lending Act.

The Truth In Lending Act was enacted by Congress in 1968 as a part of the Consumer Protection Act. The intent was to protect consumers by requiring clear disclosure of certain lending details for mortgages, credit cards, and other financial transactions.

Before the Truth in Lending Act was enacted, credit documents were presented in a wide variety of ways. This made it difficult to apply for home loans or other financing, as it was hard to compare the various loans.

Today, home loans (and other financing) carry a standard amount of information presented in a uniform way. This makes it easier for consumers to determine if Bank A, Mortgage Broker B, or Credit Union C is providing the best mortgage rate on a California mortgage.

Mortgage Terminology Made Simple

Your California mortgage documents must contain information about the amount of the loan, the interest rate structure, the total interest you will pay over the life of the loan, and the other key financial terms. This information is listed at the top of the page in a bold area to ensure visibility.

Applying for a home loan can be an exciting--and confusing--time. Luckily, the Truth in Lending Act is in place to help you examine all the financing details.

Source
U.S. Department of the Treasury

About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing home improvement columns for 15 years.