What Borrowers Can and Cannot Do During the Refinance Rescission Period

When you refinance your home, federal law gives you a three-day rescission period - a short window where you can cancel the loan even after signing closing documents. This waiting period is designed to protect homeowners from rushing into a refinance they might later regret.

What You Can Do

• Review your closing documents carefully to confirm the terms, rate, and fees are exactly what you agreed to.

• Ask questions or request clarification from your leader if anything seems unclear.

• Cancel the refinance in writing before midnight of the third business day if you change your mind.

What You Cannot Do

• You can’t receive loan funds or pay off your old mortgage until the rescission period ends.

• No major changes (like switching loan terms or cash-out amounts) can be made without restarting the disclosure process.

• You can’t skip the waiting period - even if you’re ready to move forward immediately.

Why It Matters

This brief pause ensures borrowers have time to feel confident in their decision. Once the three days pass with no cancellation, the loan funds are disbursed, and your new mortgage officially takes effect.

Understanding what you can and can’t do during this time helps you avoid unnecessary delays and ensures a smooth refinance closing.