What is meant by “security” on the federal truth in lending disclosure statement?
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What is meant by “security” on the federal truth in lending disclosure statement?
I am refinancing a rental house. In the statement under “Security” it states, “You are giving a security interest in real property you already own”. If I sign this form, does it mean that I am giving interest in the rental house I’m refinancing, plus my principle house that I own to the lender?
Asked on October 24, 2012 under Real Estate Law, California
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
The term "security" with respect to your question means the home or property that will be subject to a mortgage on the refinance of the loan that you are getting. The "security" will be designated with respect to the loan. Hence you need to make sure that the security is the rental home that you are refinancing and not your main home you reside in.
If you fail to honor your loan payments on the property which is the secuirty for the loan, the lender can foreclose upon it. Hence, you should consult further with a real estate attorney with respect to the matter you are writing about.
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