Mortgage Refinancing: The Rescission Period

If you are going through the mortgage refinancing process, you are going to have a right of rescission with the terms of the loan. Here are the basics of the rescission period and how it works.

Rescission Period

The rescission period in mortgage refinancing is a certain amount of time that you can still back out of a deal even after you have signed the paperwork. In the mortgage industry, the rescission period is three days. This means that if you start working with a lender and you get signed up for a new mortgage, you can change your mind anytime within the next three days and there will not be any problems.

How It Works

With the rescission period, you are dealing with business days and not actual days. In this case, business days refers to everyday except Sunday and holidays. If you were to close a loan on a Tuesday, your rescission period would start the next day on a Wednesday. You would then have until Friday at midnight to back out of the loan according to the law. In most cases, the mortgage lender is not going to want to let you back out. Therefore, it is important that you understand how this rule works and know your rights.

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