Three Day Rescission comes from the Truth in Lending laws and allows you three business days to change your mind before committing to mortgage refinancing. Once your loan documents are signed with any lender like Amerisave or Wells Fargo Refinance, the 3 Day Rescission period begins and you can change your mind and back out of the loan. Here are the basics you need to know about your three day rescission period to protect yourself from predatory home lending.
Right of 3 Day Rescission Revisited
Your rescission period starts the day after you sign the new loan documents and after three days, including Saturdays. (Sundays and Federal Holidays don’t count) Your loan is final after midnight on the third rescission day.
Suppose for example that you sign for mortgage refinancing on Tuesday morning. Your Rescission period starts Wednesday and ends Friday night at midnight. Your loan will most likely fund on the following Monday. If you close on a Friday, your three-day rescission period starts Saturday, does not include Sunday, and ends Tuesday night at midnight.
If you decide at anytime during those three days that this lender is not for you, you can back out of the loan without penalty. Keep in mind that the rescission period only applies to mortgage refinancing on owner occupied homes. New purchases and investment properties do not have the right to three-day rescission. If you’re refinancing with the same lender as your original loan, the lender may restrict your right of rescission. Also, for cash out mortgage refinancing, the rescission only applies to the cash out part of the home loan.
You can learn more about protecting yourself from predatory lending, including lender junk fees and markup by checking out my free underground mortgage videos.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
