Finance
The Truth in Lending Act (TILA) allows borrowers to rescind certain mortgage transactions within 3 business days. This right of rescission applies to:
AAll mortgage transactions including purchase money mortgages
BRefinances and home equity loans on a primary residence, but NOT purchase money mortgages✓ Correct
COnly FHA and VA loans
DOnly loans over $500,000
Explanation
TILA's 3-day right of rescission applies to non-purchase credit transactions secured by the borrower's primary residence — such as refinances, home equity loans, and HELOCs. It does NOT apply to purchase money mortgages (loans used to buy the home). This allows homeowners to reconsider after a high-pressure sales environment but not delay home purchases.
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