Buying a Home?: Truth in Lending Act 101

Springtime is the time of year when most property goes on the market.   Perfect weather makes for a great opportunity to show a house and see it in its full bloom.  If you are buying a house, it is sure that you have many things on your mind such as school districts, commute time to work, square footage, and a host of other items.  However, the devil is normally in the details and when we talk about details we talk about the word, mortgage.
Whether this is your first home or your retirement home chances are you will have to finance at least part of your house on a bank mortgage.  But how do you determine what lender is best for you?  There are hundreds of websites that focus on interest rates, down payments, and other information, but what few lenders want you to know about is the Truth in Lending Act
The Truth in Lending Act or “TILA” was passed in 1968 in an attempt to standardize the disclosures and interest rate information contained in borrower agreements for mortgages, credit cards, and other interest-bearing loans.  This information is intended to be transparent and straight forward, allowing credit consumers to shop for the best rate and not fall victim to deceptive or even illegal credit practices.
One of the most valuable provisions of TILA is the provision that allows consumers to rescind or cancel a loan or mortgage within (3) three business days without facing any type of financial or credit penalty.  In some circumstances, if the lender has failed to properly disclose certain information to the consumer, the consumer has up to three years to rescind their loan without penalty.
The most well-known product of the TILA is the development and subsequential requirement of the Annual Percentage Rate (APR) for all lenders.  For homebuyers who normally have a fixed budget for purchasing a home, this allows them to shop for the lowest APR available to them and potentially save thousands of dollars in interest on their mortgage.
The Truth in Lending Act is just one of the federal consumer protection laws that assist home buyers and credit card users from deceptive and illegal trade practices.  If you believe you are a victim of illegal lender practices or wish to exercise your rights under TILA, Fair Credit Reporting Act, Fair Debt Collection Practices Act, or Unfair and Deceptive Practices Act, you should consult a qualified attorney immediately.
The attorneys of Massey & Duffy, PLLC, are board-certified in consumer law and have served clients in the Lake City, Gainesville, Ocala, The Villages, and Alachua.  You can contact our office at (352)-505-8900 to schedule a consultation today.


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