Right of Rescission
Direct definition
A three-day window during which a borrower can cancel certain refinances or home equity loans on a primary residence.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
Rescission applies to most refinances and HELOCs on owner-occupied primary residences — not to purchase loans.
Why it matters
It gives borrowers a legal cooling-off period to reconsider without penalty.
Where you may see it
- Closing Disclosure
- Notice of Right to Cancel
- Truth in Lending disclosures
A real-world example
You sign a HELOC on Monday; funds don't disburse until after the three-day rescission window closes.
Educational and illustrative only
A common misunderstanding
The right of rescission doesn't apply to most home purchase loans — it generally applies to certain refinances and home equity transactions on a primary residence.
Ask Vabasso AI
This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026