Which of the following is a key difference between rate and term refinances and cash-out refinances regarding borrower rights?
Correct Answer
C) Cash-out refinances on primary residences have a 3-day right of rescission
Under the Truth in Lending Act (TILA), cash-out refinances on primary residences are subject to a 3-day right of rescission, while rate and term refinances are generally exempt from this rescission right. This is a significant regulatory difference that affects closing procedures and timing.
Why This Is the Correct Answer
Under the Truth in Lending Act (TILA), cash-out refinances on primary residences are subject to a 3-day right of rescission, while rate and term refinances are generally exempt from this rescission right. This is a significant regulatory difference that affects closing procedures and timing.
More Mortgage Knowledge Questions
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A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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