Your home not only provides you with a place to live, but it also provides you with something that you can tap into to allow for you to pay for other things, especially during an emergency. The advantage of this option is that you can often get a loan for a lower APR. Getting a home equity loan might seem intimidating, but you have a waiting period which will allow you to decide whether you made the right decision.
Canceling Your Home Equity Loans
If you decide that you would no longer like to have a home equity loan, you must cancel it in writing. You can either tell the lender through a letter or electronically. This must be done within three days of getting the home equity loan.
You are allowed to cancel for any reason. The deadline for canceling is midnight on the third business day that you signed the agreement. That means that if you signed the loan on Friday, you have until Tuesday to cancel.
You are also required to be given a truth in lending notice that informs you that you have the right to cancel the loan. During the waiting period, the activities related to the loan cannot take place. For example, you will not be given the money from the loan. If the loan is intended to pay for specific services, the service provider will not be able to render these services until the waiting period has been completed.
Any money that you paid in relation to the loan will need to be refunded to you within 20 days. Also, the lender has that period to release the security interest on your home.
You Can Sometimes Waive Your Rights
Given that you may need the money immediately, such as after a natural disaster, you may sometimes waive your right to have the home equity loan canceled. Under this situation, you will need to have a written statement that explains the situation that you have. Each individual who has ownership in the home must sign the statement.
Not All Situations Allow for a 3-Day Waiting Period
If the lender of the loan is a state agency, you will not have a three day waiting period. Also, if you are refinancing your home, you will not have the same waiting period. As a result, you should ask the lender about the three-day waiting period under all situations where you are applying for the home equity loan just to make sure that you are given this right and so that you do not depend on it.
Thanks to federal law, you can receive a home equity loan with the knowledge that you can back out at any time and return everything back to normal.Share