What is a right of rescission period on a refinance?
We get this question a lot when people are refinancing. They’re wondering how soon after I sign the paperwork is my new loan going to take effect? How soon is this great lower interest rate going to start to affect my payment? And the answer is, after this rescission period.
The right of rescission, is a three day waiting period after you sign your paperwork, during which time you can rescind the loan. Basically, giving you is three business days to review the terms of the loan, the paperwork and to make sure that this is something you want to proceed on.
There’s actually a document in your closing paperwork that you can sign and return by midnight of the day before your new loan takes effect that tells the lender that you wish to rescind – And as long as that document’s turned in, the loan is withdrawn. The loan doesn’t fund or disperse is another term and you don’t proceed on the loan.
Now this does not apply on investment properties or second homes, only on primary residences.
So the right of rescission period on a refinance is a three business day waiting period on a primary residence refinance after you sign the paperwork before your new loan takes effect. I hope that helps you guys out if you’re looking to refinance.
Now if you have any questions about your specific situation, if you want to look at if a refinance makes sense or not, what different programs are available, maybe even some that you haven’t even heard of, I’d be happy to help you out with this. Just give us a call at 303-670-0137.