Under the federal Truth in Lending Act (TILA), the 3-day right of rescission applies to which of the following transactions?
Correct Answer
B) Refinances and HELOCs secured by the borrower's primary residence
Under TILA, the 3-day right of rescission applies to non-purchase refinances and home equity lines of credit (HELOCs) secured by the borrower's primary residence. It does not apply to purchase-money mortgages (where the loan is used to acquire the home), nor does it apply to commercial real estate transactions. This federal rule applies uniformly in Maine as in all states.
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Related Topics & Key Terms
Related Topics:
Key Terms:
Related Concepts
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
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