A revised closing disclosure is required in which of the following situations?

A revised closing disclosure is required in various situations to ensure that borrowers have the most accurate and updated information about their loan terms.

When the annual percentage rate (APR) becomes inaccurate, it can affect the overall cost of the loan. An inaccurate APR can mislead borrowers about their payment obligations and the total cost of the loan over time. Hence, a revised closing disclosure must be provided to correct this information.

Similarly, if the loan product changes, such as a shift from a fixed-rate to an adjustable-rate mortgage or vice versa, this alters the terms and structure of the loan that the borrower has agreed to. Since different loan products come with distinct risks and benefits, a revised disclosure is necessary to inform the borrower of these changes.

The addition of a prepayment penalty also warrants a revised closing disclosure. This penalty can have significant financial implications for borrowers, potentially leading to unexpected costs if they choose to pay off their loan earlier than scheduled. Ensuring that borrowers are aware of any prepayment penalties before they finalize their loan is crucial for informed decision-making.

Since all of these situations—changes to the APR, alterations in the loan product, and the inclusion of a prepayment penalty—require the borrower to receive updated information so they can fully understand the