Regarding truth-in-lending, what is the required waiting period after a rate increase of 0.125% or greater?

• A. Three business days
• B. Three calendar days
• C. Seven business days
• D. Seven calendar days

Answer: (A)

Under Truth-in-Lending, when an adjustable-rate mortgage changes its rate by 0.125% (1/8 of a percent) or more, the lender must provide a revised disclosure and wait three business days before the new rate can take effect. The three-day period starts when the updated disclosures are delivered to the borrower, and it counts only business days (weekends and holidays don’t count). This waiting period gives the borrower time to review the new terms and understand the impact on payments. The rule uses business days, not calendar days, which is why three calendar days is not correct, and the other longer options don’t apply here.