Homeowners preparing to refinance home loans should be aware that they have rights designed to protect them as consumers. One of the most basic and important rights homeowners have when they’re ready to refinance home loans is the Right of Rescission included in the Truth in Lending Act. The Right of Rescission provides borrowers with 3 business days to cancel out after signing their loan documents. The 3 days excludes holidays and weekends.
If your refinance home loan qualifies for the Right of Rescission (and many do), you can cancel your loan and receive a refund of all payments. You simply need to provide written notification of your decision to all parties involved in your loan. This usually includes your lender, mortgage broker, and Title Company. You can fax your written request, and it is wise to follow up with a phone call to be sure your documents were received.
You can take advantage of the 3 business days afforded to you by the Right of Rescission to carefully review all of your refinance home loan documents. It is a very good idea to take the time to be certain you are getting the exact loan and terms you believe you agreed to.
If your mortgage broker hasn’t informed you about your Right of Rescission and you believe your home refinance loan qualifies, be sure to ask about it. Knowing your rights is a very important way to protect yourself against making a mistake with one of the most important financial assets you own – your home.
Not all home refinance loans qualify you for the Right of Rescission. You must for instance be taking out a home refinance loan with a new lender, or borrowing extra funds to obtain cash with your refinance. There are other exclusions that may disqualify borrowers from the Right of Rescission, as well, which is why you should ask early on if you are interested in qualifying for this extra level of protection.