What law addresses unexpected financing costs at closing?

The Truth in Lending Laws are designed specifically to protect consumers in credit transactions by requiring clear disclosure of the terms and costs associated with borrowing money. This law mandates that lenders provide borrowers with detailed information about the annual percentage rate (APR), financing charges, and the total cost of credit. This transparency helps ensure that consumers are aware of any unexpected financing costs that may arise at the closing of a real estate transaction.

Understanding these laws is crucial for both consumers and real estate professionals, as the clear communication of costs allows for informed decision-making. This is particularly important during the closing process, where unexpected fees can significantly impact the overall financial burden of a transaction. By ensuring that all financing terms are disclosed upfront, the Truth in Lending Laws help to promote fair lending practices and prevent deceptive lending behaviors.