Truth-in-Lending Disclosure (TIL)
The Truth-in-Lending Disclosure, also known as the “TIL”, is another importnant document that Federal law requires be delivered within three (3) business days of application. The document is designed to show how much the loan costs over time in a term called Annual Percentage Rate. As with the GFE document, do not get caught up on the included information and ask your Mortgage Pilot any questions you may have about the document.
When you look at the document, you are going to see these five main boxes of information:
- Annual Percentage Rate (APR)
- Finance Charges
- Amount Financed
- Total of Payments
- Payment Schedule
This document can be very scary for those whom do not understand it. For one thing, the total of payments will usually be about three times the size of the amount financed due to interest over time. Don’t get alarmed at that amount and let your Mortgage Pilot break down the realities of this document.
Also, APR has been used as another mortgage shopping tool, but due to its ability to be manipulated, among other things, this is not a reliable shopping comparison and is only a part of the overall process in determining the best mortgage deal.
Once again, your Mortgage Pilot has goals to attain in their review, again preventing the following issues:
- Higher than market interest rate
- Loan program matches the GFE and your needs
- Amount financed matches the GFE and what you desired
- All fees are calculated properly and included in the APR
- Details match the GFE
Also, just like the GFE, this disclosure is an estimate and not a guarantee. Laws do not require the lender to match these numbers, though their may be limitations as to how much they can differ. Your Mortgage Pilot will help you ensure you are getting a fair and deliverable deal.
