We have a customer who is paying off a contract for deed on a primary residence with a loan from our bank. From what I can tell and previous experience with auditors this is considered a purchase and not a refi. I have others at the
Bank questioning why. I hope this information is helpful.
If they are acquiring the property upon paying off the contract for deed (with the loan you’re making) then it would be a purchase.
1026.37(a)(9)”(i) Purchase. If the credit is to finance the acquisition of the property identified in paragraph (a)(6) of this section, the creditor shall disclose that the loan is for a “Purchase.””
If they have previously acquired the property (through the contract for deed/land contract) then it would be a refinance.
Let us know if you have other questions.
This reply was modified 1 week, 5 days ago by rcooper. Reason: emphasis of acquisition