Home Mortgage Loans

Your Right to Cancel a Home Loan


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 Act. 

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 3rd business 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.