The VA 3 Day Rescission Period
The VA loan used to buy and finance a property is the best program around for those who qualify and need or want a no money down program. This in addition to reduced closing costs and no monthly mortgage insurance premium enhance the VA loan’s popularity. When you sign a sales contract, you typically have a time frame allowed in which to either alter your offer or withdraw it completely all without fear of losing your earnest money deposit. Perhaps an inspection showed an item that made you rethink your offer so you either asked the seller to reduce the sales price, fix the item or walk from the deal altogether.
But at some point the privilege of cancelling a contract and withdrawing your loan application doesn’t come without a penalty. You can’t just cancel the entire process on a whim without losing your deposit. Even if you get to the closing table to close on your transaction, if you change your mind not only will you lose your deposit you may be on the wrong end of a lawsuit.
With a refinance however, you do have more time to reconsider your move. The VA streamline refinance program is perhaps one of the most popular features of the VA home loan benefit. A refinance is typically initiated to obtain a lower interest rate. During the process you may begin to question your decision. Perhaps interest rates didn’t move as low as you wanted or some other reason. A VA refinance, unlike a purchase transaction, has a three day grace period called the rescission period allowing you three business days in order to reflect on your decision to refinance. You will go to the closing table, sign your papers then go home and wait. The rescission period isn’t something you can waive, it’s a requirement for all VA refinance loans. If you change your mind, you simply sign your rescission papers and the entire transaction is cancelled.