The homeowner has
three business days after signing the
papers to cancel the loan. (These three
days are known as the rescission period.)
Upon expiration of this period, the loan funds
are disbursed. The homeowner accesses
the funds in the form of the payment
option selected. Any existing debt on the
home is paid off. A new lien is placed on
the home. The homeowner may use the
loan proceeds for any purpose.
The only exception to a homeowner's right of rescission is on a HECM for Purchase reverse mortgage. There is no rescission option on a purchase money mortgage.