How long is the recission period for a refinance transaction if disclosures are provided correctly?

The recission period for a refinance transaction is three business days when disclosures are provided correctly. This means that if a borrower wishes to cancel a refinancing agreement, they have the right to do so within this three-business-day window without any penalty.

The rationale behind this timeframe is rooted in the Truth in Lending Act (TILA), which aims to protect consumers by ensuring they have adequate time to understand the terms of their loan and consider their options after receiving the required disclosures. The three-business-day period allows borrowers to reflect on their decision and ensures they are not rushed into finalizing a mortgage transaction.

In this context, business days are defined as all days except Sundays and legal public holidays, which adds to the transparency and consumer-friendly aspect of the law. This period applies only to refinance transactions, and understanding this timeframe is crucial for both consumers and professionals involved in mortgage lending.

Other options like five, two, or one business day provide incorrect timelines that do not align with TILA guidelines; thus, they do not reflect the legal framework governing recissions in refinance transactions.