Utah Contractor Practice Exam

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Which time frame allows homeowners to cancel renovations after accepting a third-party lender’s terms?

24 hours
3 business days
5 business days
1 week

The correct answer is: 3 business days

Homeowners are allowed to cancel renovations after accepting a third-party lender's terms within a specific time frame known as the "right of rescission." This right is typically set at three business days. During this period, homeowners can reconsider their decision and cancel the contract without any penalty, allowing them to assess whether the loan terms and renovation plans still meet their needs and financial situation. This three-day window is designed to protect consumers from high-pressure sales tactics and ensures they have adequate time to review loan agreements. If homeowners decide to cancel during this time, they can do so by notifying the lender in writing. This right is a standard practice established by federal law for certain types of loans that involve the borrowing of money against a primary residence. The other options suggest different lengths of time that do not align with the established right of rescission.