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However, the borrower will not get the appraisal fee back, if he has paid for one.
Usually this grace period is given to all borrowers so that if you want to back out of the loan agreement because you are second thoughts, you can do so. This is a no string attached cooling off period and is primarily given to those borrowers who are looking to refinance their existing mortgages.
The three day rescission period state the day after the loan agreement has been signed and finalized. The applicant receives the funds after the third day. So, why do borrowers get a three-day grace period? Well, this is given so that the borrower can reevaluate the mortgage and closing costs. It is quite possible that many people opting for refinancing end up doing it for all the wrong reasons and once they close the loan, they are full of misgivings and remorse. This period is for those people, and if they decide to cancel the loan during the rescission period, the deal is no longer valid, and the borrowers simply stay on with their existing loan.
There are many occasions where one knows that the loan representative is trying to dupe you into paying more money than what is the norm. The rescission period gives you an opportunity to decide not to go through such a lender. You can withdraw your application and get your money back. However, please be aware, that not all the money you have paid will be returned.
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