Definition
The right of rescission is a federal law that allows a homeowner to cancel certain types of refinance loans within three business days after closing.
Understanding Your Cancellation Rights
The right of rescission comes into play after signing the mortgage agreement for a refinance on your primary home. It offers a three-day period to reconsider and rescind the deal without penalty. This cooling-off period is designed to protect homeowners from hasty decisions. Example: If you signed a refinance agreement on Monday, you have until midnight Thursday to cancel. It's important to note that this right applies only to refinances, not to the purchase of a new home. It's not a delay in your loan process but a safeguard to ensure you're comfortable with your decision.
