What is the maximum rescission period after closing?

What is the maximum rescission period after closing?

• A. 3 days
• B. 3 months
• C. 3 years
• D. 5 years

Answer: (C)

The key idea is the right to rescind under TILA for loans secured by your primary dwelling. If you’re taking out a refinance, a home equity loan, or a similar loan on the home you live in, you have a limited window to cancel after the loan is consummated and after you’ve received the required disclosures, including the Notice of Right to Cancel. That window lasts three days, specifically three business days, and it ends at midnight on the third business day after consummation. It does not apply to purchases, and it does not extend to years-long periods. So the maximum rescission period after closing for these types of loans is three days.

The key idea is the right to rescind under TILA for loans secured by your primary dwelling. If you’re taking out a refinance, a home equity loan, or a similar loan on the home you live in, you have a limited window to cancel after the loan is consummated and after you’ve received the required disclosures, including the Notice of Right to Cancel. That window lasts three days, specifically three business days, and it ends at midnight on the third business day after consummation. It does not apply to purchases, and it does not extend to years-long periods. So the maximum rescission period after closing for these types of loans is three days.