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Five Star Mortgage, LLC
2280 Satellite Blvd.
Duluth, GA 30097
OFFICE 770.495.3516
FAX 770.495.3528
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Truth-In-lending Act
The Truth in Lending Act requires lenders to fully disclose terms involving consumer credit transactions to prospective debtors. The Truth in Lending Act outlines three fundamental rules: (1) a creditor can only advertise deals that are available to everyone and not just preferred borrowers; (2) advertisements must clearly state either all or none of the terms of a credit transaction; and (3) if the credit is to be repaid in more than four installments, the terms must clearly state the Annual Percentage Rate or the cost of credit. Additionally, prior to signing an installment contract, creditors must disclose the monthly payment, the number of monthly payments and the amount being financed.
Annual Percentage Rate
The Annual Percentage Rate (APR) is an annual rate that is different from the interest rate. It is primarily used to compare loans programs from different lenders. The APR can be defined as the true cost of credit. Typically, the Annual Percentage Rate is comprised of points (both discount points and origination points), pre-paid interest, loan processing fee, underwriting fee, document-preparation fee, and private mortgage-insurance if applicable. The APR does not typically contain title or abstract fee, escrow or settlement fee, attorney fee, notary fee, document preparation (charged by the closing agent), home-inspection fees, recording fee, transfer taxes, credit report, and appraisal fees.
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