Casa Academy

Reviewed by Casa Academy and updated July 29, 2026 using the current DBPR checklist and Pearson VUE scheduling guidance.

Truth in Lending Act

The Truth in Lending Act (TILA) is a federal consumer credit law implemented by Regulation Z that requires lenders to disclose credit terms including APR, finance charge, and payment schedule so borrowers can compare loan offers before committing.

Exam context

TILA (Regulation Z) requires APR and finance charge disclosures on consumer credit. Loan Estimate and Closing Disclosure timing apply to most home loans. Right of rescission on some refi and HELOC transactions.

Key disclosures

Creditors must provide a Loan Estimate within three business days of application and a Closing Disclosure at least three business days before consummation on most closed-end home loans. APR includes certain finance charges spread over the loan term, which may differ from the note rate. Advertising triggers additional truth-in-lending rules when specific terms are quoted.

Real estate exam relevance

Agents should know TILA governs credit advertising and disclosure timing, not property condition or title. Right of rescission gives borrowers three business days to cancel certain refinance and home equity transactions. Violations can extend rescission rights and create assignee liability. TILA works alongside ECOA anti-discrimination rules and RESPA settlement disclosures.

Examples

  • APR comparison

    Two lenders quote 6.25% note rates, but Lender A has higher origination fees, producing a 6.58% APR versus 6.41%. TILA requires APR disclosure so the borrower sees the all-in cost.

  • Rescission window

    A homeowner refinances a primary residence with cash out. TILA provides three business days to cancel after closing documents are signed before the rescission period expires.

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