Utah Contractor Practice Exam

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In a transaction with a third-party lender, when can the homeowner cancel after acceptance?

Until the first draw
Within 3 business days
Within 5 business days
Until the job is started

The correct answer is: Within 3 business days

In a transaction involving a third-party lender, homeowners typically have the right to cancel their acceptance of financing within a specific timeframe. This period is often set to protect consumers, allowing them to reconsider their decision to engage in a potentially binding financial agreement. The legally established timeframe for cancellation is within three business days following the acceptance of the loan terms. This allows homeowners an opportunity to back out if they change their mind, ensuring they are not committed to a loan they might find unfavorable after further consideration. The chosen timeframe helps to promote informed decision-making in financial commitments. While other options may suggest varying cancellation periods or conditions related to project timelines, they do not align with the standard consumer protection laws designed to safeguard homeowners in financial transactions with lenders. Understanding this right is crucial for homeowners to ensure they do not inadvertently bind themselves to terms they are not fully comfortable with.