If the APR at the time of consummation differs from the early estimate by more than what percentage, Reg Z requires re-disclosure before closing?

The requirement for re-disclosure in Regulation Z is triggered when the Annual Percentage Rate (APR) at consummation exceeds the early estimate by more than 1/8% (0.125%). This threshold is established to protect consumers by ensuring that they are informed of significant changes in the cost of their loan product prior to closing. If the APR increase surpasses this limit, the borrower must receive a new disclosure that reflects the final terms and conditions of the loan before they proceed to close, thereby enhancing transparency and allowing borrowers to make more informed decisions. This regulation aims to prevent undesired surprises related to loan costs, ensuring borrowers are fully aware of their financial obligations.