New York State Real Estate Salesperson Licensing Exam

What additional requirement does Regulation Z (TILA) impose besides the disclosure of interest rates?

1. Closing costs

2. Monthly payments

3. Down payment

4. Loan terms

The correct answer is: Down payment

Regulation Z, also known as the Truth in Lending Act (TILA), mandates that lenders provide borrowers with clear and comprehensive information regarding the terms of their loans. While the disclosure of interest rates is a crucial component, Regulation Z further requires that borrowers are informed about various other terms of the loan that can significantly influence their financial obligations. The additional requirement relating to down payments is particularly important because it directly affects the total amount that needs to be borrowed and the upfront costs required to secure the loan. By requiring disclosure of down payment amounts, Regulation Z ensures that consumers are fully aware of the financial commitment they are entering into. This transparency helps borrowers make more informed decisions and enhances consumer protection during the lending process. The other options, such as closing costs, monthly payments, and loan terms, are indeed important aspects of the overall loan disclosure process. However, the specific reference to down payments highlights an essential upfront cost that influences the total mortgage amount, which is a significant factor in a borrower's financial planning.