Should you rescind your refinance?

The three-day cooling off period is an often overlooked right afforded to borrowers by the Federal Truth in Lending Act (TILA). Under the TILA, a consumer may rescind (take back and make void) any non-purchase security interest in their primary residence within 3 days of entering into the agreement.

What does this mean for you? This allows you, the borrower, to avoid being trapped in a loan that you are not comfortable with.

Sitting down to sign loan documents can be intimidating. With so many forms to sign and industry terms to read, many borrowers simply sign their name without truly understanding what they are committing to. The three-day right to rescision gives you three days to digest the information, get outside advice and stop the whole process if necessary.

Use it as a last resort. The process of securing a loan is both lengthy and costly. Waiting until you have already signed loan docs to decide that the rate and terms don't work for you obviously drags out the process even more. Be proactive. Use our Truth About Loans Center to learn about your loan and your lender before you get to the closing table. Make informed decisions about the agreement you are entering into in order to avoid stress at the end of the process.