How to Rescind Your Financing

 Everyone at some point in the mortgage process freaks out – they don’t want to do this, they feel like they’ve made a huge mistake, there’s thousands of dollars on the line – luckily for most people this passes. But if it doesn’t pass, if you have to figure out a way to back out at the last second, you actually have three business days to do so. Sometimes you just make a mistake, but know that yu’re going to have to pay a penalty when you back out of any home equity loan or home equity line of credit situation. If you’re buying a house you could end up on the hook for whatever the difference is in price for what the seller can sell the home for to the next buyer.

Talk to Your Team

You’ll first want to talk to your real estate lawyer, your realtor, your mortgage broker, everyone that’s been helping you find financing, selling and buying your home. This way you’re going to be able to get some perspective – it’s not rare for a borrower to have a last minute freak out. You have three days after the mortgage closes to take advantage of the right of rescission, so you’ll need to act fast. Talk to everyone on your lending and buying team to see if this is really the best option for you. Even if you do go back, you’re going to still have to pay. But hey, a little pain now is better than a lot of pain later.

Have a Lawyer Look at Your Mortgage Contract

Once you’ve made your decision to move forward, you’re going to want to talk to your lawyer. Have them look over the contract and see what you can do to start the rescission process. It’s going to be a pain, but with the right lawyer you’re going to be able to get this done on time. This usually takes the better part of a day, leaving you with one more day to get the job done. This is where you have to take the ball and run with it. You’ll want to get the right documents to do your right of rescission paperwork; your lawyer can help you get this done.

Send Documents via Courier or Deliver it Yourself

This is the hard part – you’re going to need to either hand deliver the documents or have it sent same day via certified currier. Delivering it yourself will help you make sure it gets there on time; hand delivering it to your banker, on your own, will help speed the process along and make sure everything gets done. You’ll want to work with your lawyer to make sure everything’s filled out correctly too! Don’t leave anything to chance.

You’ll probably have to pay a withdrawal penalty and then sign some termination forms, and then you’re done. From here you can go back to doing whatever you were doing before.