When must a variable rate disclosure be delivered to the borrower?

The requirement to deliver a variable rate disclosure to the borrower at the application stage is rooted in the need to provide transparency and inform borrowers about the terms of their mortgage. When borrowers are considering a loan that includes a variable rate, they must understand how the interest rate can fluctuate and what factors influence those changes. Delivering this disclosure at the application stage ensures that borrowers receive this vital information early in the process, allowing them to make informed decisions about whether to proceed with the variable rate loan option.

This timing is also significant because it aligns with the regulatory obligations set forth by lending laws, which emphasize the importance of clear communication and disclosure to protect borrowers from potential misunderstandings about the mortgages they are considering. By providing the variable rate disclosure at application, lenders fulfill their responsibility to ensure that borrowers have a clear understanding of the mortgage product they are dealing with right from the start.