U.S. Mortgage Index

Right of rescission

Definition

The right of rescission is a federal right to cancel certain refinance or home-equity credit transactions after signing. Official consumer material states that a purchase-money mortgage used to buy a home does not carry this cancellation right.

In plain English

Some mortgage transactions can be canceled for a short time after signing. Official CFPB consumer material calls that cancellation right the right of rescission. A loan used to buy the home is not in that category. This page names the right. It does not turn the cooling-off period into a calendar or legal advice.

Technical definition

CFPB’s key-terms heading for right of rescission is PRIMARY. It distinguishes purchase closings from refinance transactions. Regulation Z is supporting context. Day counts are omitted as individualized legal detail.

Why it matters

Refinance shoppers hear they can cancel. Purchase buyers often think the same rule applies. The official heading draws that line.

Sources reviewed

Important note

Do not turn the statutory cooling-off period into individualized legal advice.