More than one homeowner has signed the paperwork for a home equity line of credit, only to decide hours later that the high fees and risk to the property’s title just aren’t worth it.

Fortunately, HELOC borrowers are legally permitted to back out of a deal if they notify the lender within three business days. Borrowers do not need to have a reason for backing out; they simply need to inform the lender in writing.

The right of rescission is only available if the home equity line of credit is secured by the borrower’s primary residence. In some cases, the rescission period may be waived if the borrower can prove the money is needed for an emergency.

For more information on the HELOC right of rescission see: Home Equity Line of Credit 3-Day Right of Rescission.

Tags | Heloc, home equity line of credit, right of rescission, Truth in Lending Act