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Aug. 11, 2010 - Federal Truth-In-Lending Disclosure Statement - TIL

The Federal Truth-In-Lending Disclosure Statement is a scary but very important document you will receive when applying for a mortgage, either at time of purchase or when you refinance your mortgage. Here is a good Sample Form of a Federal Truth-In-Lending Disclosure Statement in pdf format.

The question I am asked most often (as a Real Estate Broker vs a Lender) is about the Interest Rate shown in the first block under "Annual Percentage Rate".  Most people are looking for the rate quoted by their lender on this form and are very surprised and alarmed to see a higher number in that first block at the top of the TIL. The primary purpose of that number is for comparison purposes, and to disclose what the ACTUAL rate is when you combine the up front costs with the stated mortgage rate. It is meant to be an easier way to compare total cost when shopping for a mortgage.

As example, if you are quoted a 4.5% interest rate by two different lenders, one with high up front costs and one with low up front costs, the APR will reflect which of the two mortgages is actually the better deal. The lower cost mortgage may show an APR of 4.883%, while the higher up front cost loan might show as 5.117%. BOTH are quoting you a rate of 4.5%, and in that regard are equal. BUT the APR will highlight the total cost scenario making it much clearer to you which is actually the better choice of the two mortgage offerings.

One might think that comparing the detail of the costs is a better way to compare, but that is not the case as most Lenders include costs of 3rd party venders like Title and Escrow costs, and a direct comparison of ONLY the loan costs as shown in the APR is a much better way to evaluate which is the best mortgage for you.

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Dec. 7, 2010 - RE: Federal Truth-In-Lending Disclosure Statement - TIL

Posted by Scoremore

thanks for sharing the sample form of a federal truth-in-lending disclosure statement...it's a big help to people to fill up this form,for them to be aware of this  while filling up.very informative and useful blog...

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Mar. 7, 2011 - RE: Federal Truth-In-Lending Disclosure Statement - TIL

Posted by Lån

Yes, unfortunately not many people understand the difference between actual interest rate and the rate quoted by the lender...

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Apr. 19, 2011 - RE: Federal Truth-In-Lending Disclosure Statement - TIL

Posted by rickotton

 Thanks  for the sharing your information. its quite worthy.

Thanks

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ARDELL DellaLoggia of Sound Realty on Seattle Real Estate process and market including Kirkland, Bellevue, Redmond, Green Lake and most areas around the top of Lake Washington North of Downtown Seattle. Phone: 206-910-1000 - Mailto:ARDELLd@gmail.com

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