Under the federal Truth-in-Lending Act (TILA), the three-day right of rescission applies to:
Correct Answer
B) Refinances and home equity loans (HELOCs) secured by the borrower's primary residence
Under the federal Truth-in-Lending Act (TILA), the three-business-day right of rescission applies to refinances and home equity loans or lines of credit (HELOCs) secured by the borrower's primary residence. It does NOT apply to purchase-money mortgages used to buy a home, commercial transactions, or investment property loans.
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Related Topics & Key Terms
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Related Concepts
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
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