For issuing a revised loan estimate, what percentage change in estimated settlement charges must occur to warrant a change?

The requirement for issuing a revised loan estimate is based on a specific threshold of change in the estimated settlement charges. When the total of the estimated settlement charges increases by 10% or more from the original loan estimate, it triggers the need for a revised document to be issued. This regulation helps ensure transparency and allows borrowers to understand significant changes to their costs, ensuring they are adequately informed about the financial aspects of their mortgage transaction.

This 10% threshold is particularly important in the mortgage industry as it maintains compliance with consumer protection regulations, providing borrowers with an opportunity to reassess their options if costs are rising significantly. Lesser changes, such as 1% or 5%, do not require a revised loan estimate, as they may not materially impact the borrower’s decision-making process regarding the loan. Thus, knowing this percentage is crucial for compliance and consumer awareness in mortgage lending.