What disclosure is needed when the annual percentage rate changes after loan consummation?

When the annual percentage rate (APR) changes after loan consummation, the appropriate response is to provide a Change in Terms notice. This requirement is in place to ensure that borrowers are made aware of modifications to the conditions of their loan, particularly related to the cost of borrowing represented by the APR.

The Change in Terms notice serves as a formal communication informing the borrower of any amendment to the loan terms that could affect their repayment schedule or overall financial obligation. Notifying borrowers about changes to the APR is crucial as it impacts the total cost of the loan and helps in maintaining transparency in the lending process.

Other options, while relevant to the lending process, do not specifically address the need for communication regarding changes that occur after consummation of the loan. The Truth in Lending notice is provided initially to disclose the terms surrounding the loan application, the Loan Estimate outlines estimated terms before consummation, and the Closing Disclosure finalizes the terms at closing. However, none of those documents specifically deal with changes in terms that occur post-consummation, making the Change in Terms notice the correct and necessary disclosure in this scenario.