Any one knows about Construction Loan?

Hello
I am living in Virginia. Year 2008 I purchased a house ($ 300,000.00)-Lender was BB&T Bank. Couple months later I decided to build my dream house. I contacted BB&T Bank (same lender) loan officer to apply for the construction loan. I wanted have $ 500K for C.L. At the settlement I found something that Bank approved $ 800K and paid off my existing loan of $ 300k and gave me $ 500k.I asked loan officer that why he applied $ 800k instead of $ 500k. I wanted have just $ 500k for C.L. It looked like they refinanced existing mortgage and gave me a C.L. which I didn’t request. He answered that to apply for the construction loan, lender must to close existing loan first (refinance) and approve C.L.
I had no choice but to trust him.
I don’t know. Is this right way to do it? Was he right about that?
*I believe I paid more money (closing cost) because of the volume of the loan.

Thanks.
I want to tell you more detail about this.
Let’s say that 123 Bank Rd. is my address.I paid $ 300k for old and small house.I decided to demo the house and build new house on same site.
My plan was to keep the existing mortgage ($ 300) and open C.L. separately ($ 500K). (Such as a home equity) When I contacted loan officer he told me that’s possible.
At the settlement table I found that-(History-BBank approved $ 300K.Couple months later I applied construction loan to B Bank $ 500K and try to keep existing mortgage $ 300K. Bank loan officer said OK!.)-Bank created $ 800K instead of $ 500K construction loan. They paid off existing $ 300K(same Bank)mortgage and opened $ 500k as a construction loan. At the end I borrowed same amount money($ 800K).That is true. But my point was that because of they created bigger loan I think I paid more money at the settlement(May be loan officer made more commission. I don’t know.)
This is just my opinion.

Hello
I am living in Virginia. Year 2008 I purchased a house ($ 300,000.00)-Lender was BB&T Bank. Couple months later I decided to build my dream house. I contacted BB&T Bank (same lender) loan officer to apply for the construction loan. I wanted have $ 500K for C.L. At the settlement I found something that Bank approved $ 800K and paid off my existing loan of $ 300k and gave me $ 500k.I asked loan officer that why he applied $ 800k instead of $ 500k. I wanted have just $ 500k for C.L. It looked like they refinanced existing mortgage and gave me a C.L. which I didn’t request. He answered that to apply for the construction loan, lender must to close existing loan first (refinance) and approve C.L.
I had no choice but to trust him.
I don’t know. Is this right way to do it? Was he right about that?
*I believe I paid more money (closing cost) because of the volume of the loan.

Thanks.

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