Refinancing Your Delaware Mortgage? Be Aware Of The 3-Day Rule.
As a Delaware real estate attorney, I’ve found that many people who refinance the mortgage on their home aren't aware that the funds from their mortgage company won't be disbursed on the day of settlement. This can be quite a shock for those who are expecting to get money back in order to pay bills. This article explains the 3-day right of rescission, and it’s the third in a series of articles about refinancing.
When you refinance the mortgage on your home, federal law requires your mortgage company to give you 3 days after settlement to cancel (or rescind) the transaction, without any cost to you. Why would a person cancel? Here are the 2 most common reasons. The terms of the new mortgage might not be what you were promised by your loan officer. Or, you might find out that you can get a lower rate elsewhere. If you decide to cancel, you’re required to do so within three business days from the date of your refinancing settlement. Although federal law states that Saturday should be treated as a business day, not all mortgage companies include Saturday when calculating the 3 days.
If you cancel, the law also states that within 20 calendar days after your mortgage company receives your notice, they have to take the steps necessary to reflect the fact that the new mortgage on your home has been cancelled. They also have to return to you any money you gave to them or to anyone else in connection with this transaction.
You can use any written statement that’s signed and dated by you and states your intention to cancel. You can also use a cancellation form that you’ll receive at settlement.
The other articles in this series on refinancing are Refinance Your Mortgage In Delaware and Should You Pay Points When You Refinance Your Delaware Mortgage?
