A borrower is purchasing a home for $300,000 with a down payment of $60,000. They are obtaining a mortgage for $240,000. Three days before closing, they decide to increase the loan amount to $250,000 to pay for immediate repairs. How does this change the transaction classification?
Correct Answer
A) It remains a purchase transaction
This remains a purchase transaction because the borrower is still acquiring the property. The additional loan proceeds for repairs in a purchase transaction don't change the fundamental classification. However, this change would likely require a new Loan Estimate and could affect closing timeline due to TRID waiting periods.
Why This Is the Correct Answer
This remains a purchase transaction because the borrower is still acquiring the property. The additional loan proceeds for repairs in a purchase transaction don't change the fundamental classification. However, this change would likely require a new Loan Estimate and could affect closing timeline due to TRID waiting periods.
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