What is considered an acceptably small adjustment in APR before triggering a new closing disclosure waiting period for regular transactions?

An acceptably small adjustment in the Annual Percentage Rate (APR) before triggering a new closing disclosure waiting period for regular transactions is defined as 1/8 of 1%. This threshold is established to determine whether changes in the APR are significant enough to merit a revised closing disclosure and a subsequent waiting period.

When the APR changes by more than this designated amount, it indicates a modification that could impact the borrower's overall cost of the loan significantly enough to warrant transparency and the opportunity for the borrower to reassess their decision. This is in line with regulatory requirements intended to protect borrowers.

Understanding this threshold is vital for ensuring compliance with mortgage lending laws and providing clear communication to borrowers about their loan terms, as any substantial changes need to be communicated effectively to avoid confusion and ensure informed decision-making.