When you sign documents for a mortgage refinance or home equity loan, you have a window of opportunity to cancel the loan
transaction, as guaranteed by the Federal Truth In Lending
Federal law requires that your lender gives you three business days to
cancel your signed home equity loan or refinance
documents, without any penalty. You have the right to change your mind until midnight of the
day, including Saturday, but not Sunday.
Your lender should give you a Truth In Lending disclosure,
and 2 copies of the right of rescission notice, when you sign
your loan documents. If for any reason, you decide to cancel
your equity loan, the notice must be signed and delivered to the
lender within the 3 day rescission period.
This 3 day right of rescission period applies to a home
equity loan, 2nd mortgage, or a refinance for an owner occupied primary
residence. It does not apply to any other properties, such as, a
home for investment, rental, or vacation. It also does not apply
to a mortgage to purchase a home.