What Is Right of Rescission?
The right of rescission is a federal Truth in Lending Act protection giving homeowners three business days to cancel certain refinance or home equity loans on their primary residence — funds can't be disbursed until that period expires, sometimes noted as a transaction being "subject to statutory rescission."
Why it matters
This right applies to refinances and home equity loans on a primary residence, not to a purchase mortgage — closing on a home purchase isn't subject to the same waiting period.
Related Terms
More Financing Terms
This definition is provided for general educational purposes and is not financial, legal, tax, or real estate advice. Verify important decisions with appropriately qualified professionals.
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