What action should a broker take if the Annual Percentage Rate on a loan increases just before closing?

When the Annual Percentage Rate (APR) on a loan increases just before closing, the broker should delay the closing for a new seven-day waiting period. This action is in accordance with regulations regarding the Truth in Lending Act (TILA), which mandates that if the APR increases significantly, borrowers must be given a new disclosure and a waiting period to reassess their options and make an informed decision before proceeding with the loan.

The seven-day waiting period allows borrowers to fully understand the implications of the rate increase, including its impact on their monthly payments and overall loan costs. This requirement is designed to protect consumers from unexpected changes that could affect their financial commitments.

In contrast, confirming that the closing will proceed as scheduled would disregard the change in terms that consumers need to evaluate. Negotiating a better rate with the lender is an option, but it does not address the immediate need for additional time to review the revised loan terms. Advising buyers to cancel their loan application would be premature and could dismiss potentially beneficial options available to the borrowers, thereby disregarding their rights as consumers. Delaying the closing is the most appropriate action to ensure compliance with legal requirements while safeguarding the interests of the buyers.