Disclosures From Lenders

The Federal Truth in Lending Act requires lenders to disclose any important terms and costs of their home equity plans to the consumers, including the APR, miscellaneous charges, the payment terms, and information about any variable-rate feature. Nobody can charge you any fees until you have received this information and are aware of it. Typically, you will obtain these disclosures when you receive an application form and you will also get additional disclosures previous to opening the plan. If any term (other than a variable-rate feature) changes before the plan is opened, the lender must return all fees if you decide not to enter into the plan because of the change that occured.

Opening a home equity line is very serious and should be thought through carefully considering all other options and consequences since this type of transaction puts your home at risk. If the home involved is your primary residence, the Truth in Lending Act gives you 3 days from the day the account was opened to cancel the credit line just incase you change your mind. You simply inform the lender in writing within the 3-day period and state that you are no longer interested and would like to cancel your home equity line. The lender must then cancel its security interest in your home and return all fees, which include any application and appraisal fees that were paid to open the account.