Does a HELOC have different rules than a cash-out?

Yes — HELOCs and home equity loans allow up to ~85% CLTV and often skip a full appraisal, while a cash-out refinance caps at 80% LTV and resets your first mortgage.

The 3-Day Right of Rescission

The 3-Day Right of Rescission is central to a smooth home equity approval — here are the 2026 rules and numbers.

The rule for 2026

For a loan secured by your primary residence, federal law gives you a 3-business-day right of rescission to cancel after closing with no penalty. Funds are not disbursed until this window closes. The right does not apply to a purchase loan or to a second home or investment property.

Lenders set their own overlays on top of the basics. Meet the standard below first, then confirm whether your lender layers anything extra.

Documentation you'll typically need

Recent pay stubs and two years of W-2s or returns
Two months of bank statements
Your current mortgage statement and homeowners insurance
A recent appraisal or automated valuation

Equity rules are periodically revised. Join the alerts to be told before changes affect your file.

Know Your Borrowing Power

Free to join in under 30 seconds. We will notify you when it is time.

Free to join; reply STOP to opt out. Terms & Privacy.

Frequently Asked Questions

The 3-Day Right of Rescission — the bottom line for 2026?: For a loan secured by your primary residence, federal law gives you a 3-business-day right of rescission to cancel after closing with no penalty. Funds are not disbursed until this window closes. The right does not apply to a purchase loan or to a second home or investment property.
Does a HELOC have different rules than a cash-out?: Yes — HELOCs and home equity loans allow up to ~85% CLTV and often skip a full appraisal, while a cash-out refinance caps at 80% LTV and resets your first mortgage.