How Do I Cancel a Mortgage Commitment?
A mortgage is a legally binding document between a mortgagor (borrower) and a mortgagee (lender). This contract must be adhered to by both parties. After the contract is signed, violating the terms by either party is prosecutable by law. That is, however, unless you are still in the rescission period. This is also known as the Right to Cancel. This is the only way--besides mortgage fraud lawsuits--to cancel a mortgage.
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Instructions
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Consider your options before canceling a mortgage. Once it is rescinded, you cannot accept the same deal a few days later. You'll need to reapply, go through underwriting, and likely receive a different rate and payment. Make sure you want to cancel.
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Look through your mortgage paperwork and find the document titled, "Right of Rescission." This is the document that you, and any other vested owners, must sign within 72 hours of the mortgage closing (Sundays and holidays do not apply). Sign and date this form.
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Mail--if you're sure it will arrive at your lender within 72 hours of closing--or bring the document to your lender. Once received, he must immediately cancel the loan. He cannot attempt to re-sell the loan or "save" the deal. It must be canceled at once.
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Ask for a copy of the Mortgage Release. Most lenders record mortgages while they're still in the rescission window. You'll want to make sure this document, if it was recorded, is no longer on the title of your home.
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Visit the Registry of Deeds in your town online or in-person a week after rescinding your loan. Search for your property title and land ownership documents. Make sure this mortgage is no longer attached to your home.
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References
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