Under the Truth in Lending Act (TILA), what is the minimum cancellation period a borrower has for a home equity loan secured by their principal residence?
Correct Answer
B) 3 business days
Under TILA Section 125, borrowers have a 3-business-day right of rescission for home equity loans secured by their principal residence. This right allows borrowers to cancel the transaction without penalty.
Why This Is the Correct Answer
Under TILA Section 125, borrowers have a 3-business-day right of rescission for home equity loans secured by their principal residence. This right allows borrowers to cancel the transaction without penalty.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
Under what circumstances can a Qualified Mortgage include a prepayment penalty?
A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
People Also Study
Federal Mortgage-Related Laws
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam