Finance
In Texas, the 'Truth in Lending Act' (TILA) requires lenders to provide the Annual Percentage Rate (APR) to borrowers so they can:
ADetermine the property's tax basis
BCompare the true cost of different loan offers, as the APR includes fees and costs beyond just the interest rate✓ Correct
CCalculate their debt-to-income ratio
DUnderstand the property's market value
Explanation
The APR under TILA represents the true cost of borrowing expressed as a yearly rate, including the interest rate plus certain fees (origination, points, etc.). Lenders must disclose the APR within 3 business days of receiving a complete loan application. Borrowers can compare APRs across different loan offers to find the most cost-effective financing.
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