I was asked to write the disclosure for a HELOC advertisement recently and realized it’s been many years since I had done so. I needed a refresher on the rules so I checked out Regulation Z to find out what the rules are for HELOC ads. There’s an entirely different set of rules that closed end credit ads but I realized it really boils down to telling the consumer about three important things:
- What are the costs to obtain the loan and to maintain it each year?
- What are the terms of the repayment of the loan?
- What finance charges apply, ie. what’s the APR, and how do you calculate the rate that can change over the term of the loan?
We added a new page that discusses all of these rules for HELOC Ads. Check it out at: HELOC Disclosures – How to Advertise a Home Equity Line of Credit.