What does the TIL (Truth-in-Lending) tell me?

The TIL is the Truth-in-Lending statement that you will be provided by your loan officer within three days of applying for a loan. It’s almost always provided along with the Good Faith Estimate (GFE). This statement provides you with a lot of important information about the loan that you are applying for.

The TIL also has probably the scariest number of any mortgage paperwork that you will sign. That number is the total amount of your payments, if you were to hold onto the loan for the full amortization period. Do not worry though, people rarely hold onto the loan for the full term. More often than not, they will refinance, or sell the home at some point.

One part of the TIL is the Prepayment feature description. This will indicate if your loan has a Prepayment Penalty

The TIL will tell you how much it is truly costing you to finance the house including all finance charges.

When comparing loans between different mortgage brokers it is good to have a TIL along with the good faith estimate.

The upper half of the Truth in Lending, also referred to as TIL, contains the term of your loan and the amount of the payments. For example if you were obtaining a 30 year fixed rate loan the TIL would show 359 payments at $xxx.xx and 1 final payment on your loan at $xxx.xx. 359 payments plus 1 payment equals 360 months or 30 years. The last payment almost never works out to be exactly the same amount as your first 359 payments and this is why the amount of your last payment is listed separately.

The Truth in Lending Disclosure will also disclose the grace period, the late charge, and the collateral used for the loan. It will also let you know if the loan is assumable.