What Does "Changed Circumstance" Mean in Real Estate Lending?

Changed Circumstance Definition

In real estate lending, a "changed circumstance" refers to a significant event or discovery that affects a borrower's loan terms, costs, or eligibility — allowing a lender to revise loan estimates or disclose new fees under federal regulations (like TRID).

Common Examples of Changed Circumstances

• The borrower changes the loan type (e.g., from fixed to adjustable).
• The appraised value comes in lower than expected.
• The borrower adds or removes a co-borrower.
• The borrower requests changes that affect closing costs.
• There are natural disasters or legal issues affecting the property.

Lenders must document and disclose the change to justify any increase in fees or closing costs beyond initial estimates.