What is "Truth-in-Lending" (TIL)?

It's required that mortgage lenders provide you with a Truth-in-Lending (TIL) Statement containing information on your loan’s annual percentage rate, finance charges, the amount financed, and the total payments required. Effective October 3, 2015, for most kinds of mortgage loans a new form called the Loan Estimate (LE) replaces the initial Truth-in-Lending disclosure, and a Closing Disclosure (CD) replaces the final Truth-in-Lending disclosure.

The LE and CD (fomerly TIL Statement) may also contain information on security interest, late fees, prepayment provisions, and if the mortgage is assumable. If you have an adjustable rate loan, the statement may outline the limits on the adjustments, annual and lifetime caps, and give an example of what your next year’s payment may be depending on interest rates. For adjustable rate loans the total payments figure is estimated as a worst-case scenario. The figure reflects the payments you would make if your loan adjusted upward to the maximum rate allowed by annual and lifetime caps, and then stayed at that rate for the loan duration.