Have you recently closed your mortgage loan on a refinance of your primary residence and now you have a 3 day right of rescission? Why does this exist, how does it work and what does this permit you to do? While the 3 day right of rescission may be a simple basic item, I felt that it was important enough to touch on and remind everyone what it is, how it works and why it is in place.

A 3 day right of rescission is given on all 1st mortgage loans on primary residences. This 3 day right of rescission provides a borrower with some time to review all of their closing documents and to make sure that the loan is one that they wish to keep. A borrower has until midnight on the 3rd day to cancel the loan. All cancellations should be sent out or faxed to the lender, the mortgage broker and the title company to be sure that your right to cancel has been viewed by all parties and the appropriate measures have been taken to cancel your loan before it funds.

During your 3 day right of rescission, you are given 3 business days to make sure you understand what you are getting yourself into. Mondays, Tuesdays, Wednesdays, Thursdays, Fridays and Saturdays all count as rescission day. For example if you closed on a loan on a Monday, then your 3 days would be Tues, Wed, Thurs and then your loan would fund on the fourth day which would be Friday. Another example would be if your loan closed on a Thursday, then day one would be Friday, day two would be Saturday, day three would be Monday and your loan would fund on the fourth day which would be Tuesday. Federal holidays also do not count as a rescission day. Holidays such as Christmas, Thanksgiving, Labor Day, Memorial Day, Independence Day, etc... would not count as a rescission day.

Understanding how your right of rescission works and your deadlines to cancel a mortgage transaction are very important. Your mortgage is a very big liability and probably the biggest liability that most consumers will ever take on and it should be treated that way. If you ever need to cancel a mortgage transaction before your 3 day right of rescission is up, then you will need to notify the lender and the title company in writing of your intentions to cancel the mortgage loan. It is highly recommended that you notify the lender and title company via phone and via mail and/or fax in order to insure that your request to cancel your loan is received. For more information on your right of rescission please visit: http://www.fshomeloan.com/content/recision_period.htm