* The right of rescission gives you three extra days to reconsider whether you want to use your home to guarantee repayment for a personal loan.
* Rescinding a credit transaction means you are canceling the deal.
* If you decide to exercise your right of rescission, you must notify the creditor in writing that you are canceling the contract.
* Within 20 days after a creditor receives your notice of rescission, all money or property you paid as part of the credit transaction must be returned to you.
* The law allows you to waive your right of rescission if you have a "bona fide personal financial emergency." However, if you waive your right to rescind, you must go ahead with the credit transaction.
If you need a personal loan and are thinking about using your home as security, you should know about a credit law that gives you extra time to reconsider the loan agreement. When you use your home as collateral for a loan, you generally have the right to cancel the credit transaction within three business days. This is called your "right of rescission," and it is guaranteed by the Federal Truth in Lending Act.
The right of rescission gives you three extra days to reconsider whether you want to use your home to guarantee repayment for a personal loan. The right applies even if your home is a condominium, mobile home, or house boat, as long as it is your principal residence. The right applies to certain installment loans -- where you borrow a fixed amount and repay the debt on an agreed payment schedule -- as well as to home equity credit lines -- a form of revolving credit in which your home serves as collateral.
