What constitutes a "material change" in a loan that would require a new Loan Estimate?

A "material change" in a loan refers to significant modifications that impact the essential characteristics of the loan, primarily the loan amount, interest rate, or loan terms. When a lender makes these changes, it alters the borrower's financial obligations and the overall cost of the loan, which can significantly affect the borrower's decision-making process.

The need for a new Loan Estimate arises from the requirement to keep borrowers fully informed about their loan options and associated costs. If a change is deemed material, the lender must provide an updated Loan Estimate, ensuring the borrower can evaluate the new terms and conditions accurately.

Options discussing changes to the borrower's credit score, the addition of co-borrowers, or alterations in property location or type do not fall under the definition of "material change" that mandates a new Loan Estimate. While these factors can influence the overall transaction, they do not directly change the core financial terms of the loan as defined by the regulations.