What right does the borrower have in a refinance transaction according to the Notice of Right to Cancel?

In a refinance transaction, the borrower is granted the right to cancel the loan within three business days according to the Notice of Right to Cancel. This right is a consumer protection measure mandated by the Truth in Lending Act (TILA) and applies specifically to certain types of loans, including refinances involving a primary residence.

The three-day cancellation period allows borrowers to reassess their decision and ensures that they are fully aware of the terms and conditions of the new loan. If the borrower decides to cancel, they can do so without incurring a penalty, which helps protect them from potential financial distress or buyer's remorse.

This right is fundamental to refinancing processes because it instills confidence in borrowers knowing they have a short window to reconsider their commitment to the loan. Other choices do not relate to this specific consumer protection provision. For example, while choosing a new lender or requesting additional funding may be part of the refinancing process, they do not pertain to the rights outlined in the Notice of Right to Cancel. Similarly, the option to withdraw a deposit at any time is not guaranteed in the context of this notice and varies by agreement and state laws.