We have a construction loan and the customer needs more money to complete the construction? We used to do a construction loan and then the first advance is to pay off the existing first construction loan and the remaining amount is left to draw on with no problem. Now we have to think about the purpose for TRID and then the options in the software are built around that. If I start at the top, it's not a purchase, but then when I get to refinance, it is a refinance BUT the new funds they are getting we wanted to do as a construction line of credit. I don't even know if the loan processing software will even accommodate what we are needing to do. How do you guys handle these construction loans where they need more money to finish? The house isn't livable right now so it really is still the initial construction.

but then when I get to refinance,

You stop.

Yep, that's what I thought. I was just afraid the software wouldn't let us do a line of credit option if "refinance" is the purpose. I guess we can just give the customer all of the new construction funds instead of drawing it out as the work is performed.

Why? You disclose the held back funds on the closing disclosure as a payoff.

Why is that any different then paying off an existing lot loan with the first draw?

Hopefully then based on what you guys are saying that it is just the template that I was playing with giving me trouble and it is ok to have a purpose of Refinance but still disclose it as a line of credit. Perhaps it was locked down too much in the refinance template to be able to select line of credit. Same way with the construction template, it is probably locked as a construction purpose and would not give me the fields to do my refinance information. Thanks!

A line of credit is an open-end product. I believe what you are referring to is a multiple-advance closed-end product - regardless of what your system might call it.

I believe when it's marked a consumer mortgage loan the system will only let it be a closed end line. That hasn't ever been an issue, but thanks for the heads up.

I think where you may run into an issue with a multiple advanced loan, is how your system will handle the APR calculation. Your problem is your loan is mostly drawn. When I have had a situation such as this, I have done a note modification to the existing note to increase the total rather than attempt a complete APR calc disaster.