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Ok, so I think I get this. It's pretty much a credit card, but instead the amount you take out just adds on top of your home value/equity?
I do have another question.
In this case I have a client who is doing a refi with another company, which we will call company A. He did the docs, got approved and all that and the title company recorded the refi. Now what if he changes his mind? Say, he decides its just not what he wants and he wants to pull out? I know that there is a 3-day grace period where you can retract, but I also hear that as long as you did not receive the money in your account (he also took cash out) you can still fax in a cancellation letter.
Now say, it has funded, and everything went through. Is there still a way to undue the loan? What consequences would there be, or what would be the simpplest, fastest way to undue the process?
Reason I'm asking is because one of my clients is in this situation and company A provided him with a good faith estimate for a 30 year fixed rate, but at the end they were only able to give him a 2-year arm. At that moment they convinced him that it was the only option he had so he signed. But now that company B is able to provide him with the plan he originally wanted, a 30-year fixed, what can he do to switch? Since company A already funded and it has been more than 3 days?
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