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We have a customer who would like to refinance a piece of land that is currently being financed through a private party contract for deed. The transaction will pay off the contract for deed and provide the borrower with some funds to pay off credit card debt. Do you think the loan purpose should be “purchase” or “refinance”? I’m on the fence.
Thank you!
I just wanted to put an update on this post. We decided to do it as a “refinance” and include the contract for deed as a liability since we didn’t see a way to include the credit card payoffs on the standard LE. We retained a copy of the contract in the file to show the “prior obligation” that we are satisfying and replacing.
Let me know if you disagree with our thought process.
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