What is TALC (Total Annual Loan Cost)?
Federal Truth-in-Lending law requires reverse mortgage lenders to disclose the projected annual average cost of these loans in a way that includes ALL of the costs and benefits. This disclosure is called Total Annual Loan Cost (TALC) and it shows you what the single all-inclusive interest rate would be if the lender could only charge interest and not charge any other fees. Specifically, it tells you the annual average rate that would produce the total amount owed at various future points if only that rate were charged on all the cash advances you get that are not used to pay loan costs. In other words, it shows you what you are paying in total for the money you get to spend. If you end up living in your home well past your life expectancy or your home appreciates at a low rate, you might get a true bargain. But if you die, sell, or move within just a few years or your home appreciates a lot, the true cost would be higher. There’s no way of avoiding this fundamental risk. You just have
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- What is TALC (Total Annual Loan Cost)?
