What type of loans could require re-disclosure for lowered APR?

The requirement for re-disclosure due to a lowered Annual Percentage Rate (APR) primarily pertains to adjustable-rate mortgages (ARMs). This is because ARMs have interest rates that can change at specified times, leading to fluctuations in the APR over the life of the loan. When an ARM is modified to reflect a new, lower interest rate, it is essential to ensure that borrowers are fully informed about the new terms, including the initial and subsequent changes in APR. This helps maintain transparency and compliance with regulatory requirements that mandate clear communication of loan terms to borrowers.

In contrast, fixed-rate loans maintain the same interest rate throughout the loan's duration, so a lowered APR in this case would not necessitate re-disclosure, as there are no fluctuations in the rate to communicate. Conventional loans, which can include both fixed and adjustable-rate options, would similarly not require re-disclosure for lowered APR if they're fixed. Therefore, the nature of ARMs necessitates re-disclosure practices that ensure borrowers understand their loan conditions as rates change.