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#1956084 - 08/22/14 02:40 PM Cash Out - To purchase a Prim Resid in Future
Likes to Comply Offline
Diamond Poster
Joined: Nov 2008
Posts: 1,060
In the mountains
A customer is getting a cash out loan secured with the equity in a rental home they have. The purpose of the loan is to purchase a Primary Residence in the future. The transaction did not facilitate the purchase at the time of the loan.

Is it still reportable as a purchase transaction?
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#1956089 - 08/22/14 02:44 PM Re: Cash Out - To purchase a Prim Resid in Future Likes to Comply
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,844
Bloomington, IN
Yes. That is designated use of the funds by the applicant.
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#1972177 - 10/27/14 07:12 PM Re: Cash Out - To purchase a Prim Resid in Future Likes to Comply
complyorelse Offline
Gold Star
Joined: Nov 2007
Posts: 442
U.S.
Similar situation except the borrower wanted to get cash out from the equity in their mobile home to use as gift money for a family member to buy a mobile home. Reportable as a purchase?

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#1972184 - 10/27/14 07:31 PM Re: Cash Out - To purchase a Prim Resid in Future complyorelse
JSD Offline
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JSD
Joined: Oct 2000
Posts: 512
USA
No, because their purpose is to gift money to a family member. They will not be doing a home purchase, refi or home improvements with the money.

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#1972207 - 10/27/14 08:04 PM Re: Cash Out - To purchase a Prim Resid in Future Likes to Comply
complyorelse Offline
Gold Star
Joined: Nov 2007
Posts: 442
U.S.
OK. It seemed like a stretch. Thank you for your input.

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