Can I cancel a Refinance after I sign the documents?

Question

Hey Guys,

I decided to refinance my rental property since rates are extremely low. I sign a couple of documents ( Appraisal report, Proof of delivery, hazard insurance, loan estimate, Lock agreement) but my current loan Status is Conditional Underwriting Approval. Furthermore, My loan officer also wants 2 pay studs and the lease agreement. Thanks to J Scott's Book (Recession proof real estate investing), I decided to sell the property instead. Do you guys know if is too late to back up from the refinance?

Randy L Swihart · Answer

Hi,

You might want to check with your attorney regarding Right of Recission on Non-Owner Occupied Property and the CFPB.
Typically - A residential mortgage transaction is exempt from the rescission requirements. Rescission also does not apply to mortgages on vacation homes and investment properties, even if these transactions are refinances. A state agency mortgage is also exempt. So if you don't sign you may be out some application and apparisal costs. Check with your attorney

Randy Swihart

Licensed Real Estate Broker

Licensed Mortgage Broker

Winston Covington · Answer

You have the right to cancel your loan application. However; you will face the cost of the appraisal and potential escrow / title cancellation fees. Other than that, you should have no further obligation to the lender other than the cost of your credit report.

Luan Oliveira · Answer

Good call everyone.

I skipped the part where it said rental property.  Nevertheless, just tell the lender you've decided to cancel. They can't force you to sign any closing docs anyway!

Nicholas Covington · Answer

@Luan Oliveira @Juan M Restrepo

Right of Recission is only for primary owner-occupied residences, it does not apply to investment properties. It also a time period AFTER closing has taken place and is between closing on the loan and funding of the loan. In this case, it would not apply as you are not at the stage.

You are never forced to do a loan and have the choice to cancel at any point in time up until closing and funding of the loan. Afterwhich you are obligated. If you have paid any fees for services rendered then more than likely you will just have to take that loss.

Contact your loan officer and tell them that you do not want to proceed with the loan and the reason why. Simple.

Luan Oliveira · Answer

@Juan M Restrepo

Yes. You can cancel a refinance up until three business days after you sign the closing documents. It's called Right of Recision.

In your case, you're not even up to that point yet, so you can cancel the process.

Juan M Restrepo · Answer

I Will talk to my lender and see if I can cancel without any issues. As Luan mention I do not believe I have close on the loan so It might not be an issue.  I can talk to my attorney if they are figthing me back on the cancellation. Thank so much guys on the input.

Can I cancel a Refinance after I sign the documents?

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