Federal Mortgage-Related Laws Practice Test

Under the Truth in Lending Act (TILA), specific requirements for advertising credit products aim to ensure that consumers receive clear and comprehensive information about loan terms and costs.

For advertisements that reference credit products, disclosing the Annual Percentage Rate (APR) is essential as it gives consumers a standardized measure of the cost of borrowing expressed as an annual rate. Including total finance charges is also mandatory since it provides transparency regarding the overall costs involved in the credit agreement.

Stating the minimum down payment becomes necessary when the advertisement offers specific terms related to that credit product. It helps consumers understand how much they need to pay upfront.

However, providing estimates of monthly payments is not a mandated requirement under TILA unless the advertisement is a “triggering” advertisement that brings attention to particular payment amounts or terms that create a certain expectation of credit availability or costs. Therefore, the lack of requirement for stating minimum down payments in general advertisements distinguishes this option as not being a necessary condition under TILA.