Finance
What is the Truth in Lending Act (TILA) disclosure requirement for Kansas mortgage loans?
ALenders must disclose the property's fair market value
BLenders must disclose the annual percentage rate (APR) and total cost of credit✓ Correct
CLenders must disclose competing loan offers
DLenders must disclose the borrower's credit score
Explanation
TILA requires lenders to disclose the APR, total finance charges, and other key loan terms so borrowers can compare credit costs. This applies to Kansas mortgage lenders.
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Key Terms to Know
Loan-to-Value Ratio (LTV)
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
State-Specific Concepts
Disclosure Requirements
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