How to Back Out of a Refinance Loan

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    • 1). Determine if you are able to invoke your rights of rescission for your particular refinancing loan. The most typical type of refinancing loans which are subject to your right to back out are loans through a lender other than the one through which you received the initial loan. In almost all cases, you are not able to back out of a refinancing loan if it is through the same lender. However, in situations in which you are seeking cash-out refinancing loan (a loan in which you refinance for a larger amount on the initial loan principle and opt for the difference to be paid to you in cash), you are able to back out of the cash-out component of the loan.

    • 2). Draft a letter clearly articulating your desire to exercise your rights of rescission for the specific loan. The letter does not need to explain why you are exercising your rights of rescission, but it does need to include an accurate date and time.

    • 3). Deliver the letter to the lender from which you initially sought the refinancing loan before the close of the third business day.

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