Maryland Home Improvement PSI Practice Exam

What action should a broker take if the Annual Percentage Rate on a loan has increased shortly before closing?

1. Assist the buyers in calculating new loan payments

2. Advise the buyers to file a legal action against the lender

3. Call the lender to discuss the waiting period

4. Confirm with relevant parties to delay closing

The correct answer is: Confirm with relevant parties to delay closing

When the Annual Percentage Rate (APR) on a loan has increased shortly before closing, it is essential to ensure that all parties involved in the transaction are aware of the situation and the implications of the rate change. Delaying closing might be necessary to allow for a reassessment of the loan terms, facilitate communication with the lender regarding the new rate, and give the buyer sufficient time to understand their options. This action also provides an opportunity to explore whether the borrower may qualify for different loan terms or to discuss any potential impacts on closing costs or monthly payments. Effective communication with all stakeholders can help minimize misunderstandings and ensure that everyone is on the same page in light of the changes to the loan's terms. By confirming with relevant parties to postpone closing, the broker is acting in the best interest of the buyers and protecting their rights in the transaction.