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I am looking to do a refinance, currently have the mortgage at Chase bank, but I am wondering if people have experience with better rates at other banks. How forthcoming are people generally when it comes to the "subordination" process, so I don't have to pay the ridiculous mortgage transfer tax/fee?
And doing the math in light of QE3 and lower mortgage rates in the future, the current rates are already quite low that the monthly cash flow difference between a 3.625% or a 3.25% is quite minimal, and I am not sure if it worth the risk for the wait.
I just refinanced with Astoria Federal, 3.5% no points, 30yr fixed, conforming. Jumbos much higher, however. Good experience overall.
Good morning NYCREBUBBLE,
A couple of things:
-Shopping around is strongly encouraged in the new regulatory environment. The Good Faith Estimate a Lender sends you specifically encourages it and has a section where you can plug in the numbers and compare pricing/costs between different Lenders.
-The GFE also requires you return a notice of "Intent To Proceed" based on your having accepted the GFE and your intention to move forward. The GFE gives you four days to respond after it is sent to you so you can compare GFE's with different Lenders.
-"Subordination" is a process whereby you currently have 2 mortgages (or more) and the existing second lienholder agrees to subordinate to a new first lien when you refinance.
-The method used to reduce your NY mortgage tax is called CEMA (Consolidation, Extension, Modification and Assignment). Under this method the new Lender obtains assignment of your original mortgage and thus you do not pay the mortgage tax on the amount of the existing loan being paid off, only on new money you borrow (such as closing costs folded into the new first mortgage).
-CEMA process can be complicated depending on the Lender you are working with for the new first loan and the Lender holding the existing loan and their timeliness in cooperating. In general most Lenders will allow a CEMA and most CEMA's move efficiently, usually within 30-45 days.
-Bear in mind when doing a CEMA you will pay legal fees to the existing Lender for preparation and assignment of the mortgage documents. If the property is in NYC then the cost for these legal fess is small compared to the amount of the mortgage tax on the new loan making for a decent cost savings in closing fees.
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
Trevor - We are pursuing refinancing and using CEMA in NYC. Our broker included the transfer taxes on the initial loan documents he is asking us to sign to proceed. He says he has to and that later it will be removed. Does this sound standard? I am hesitant to sign because I don't want to have to pay the large transfer taxes.
Shotgunstories, this is what happened to us when we refi'ed through BoA in 2010. We did get our CEMA in the end. The way it was explained to me, if they don't put the addnl taxes in the GFE and the CEMA doesn't come through for some reason, the bank will be on the hook for paying the taxes and giving you the loan under the terms of the GFE. I dont think any bank will take on that risk. I am not sure that you can do much beyond working with a reputable lender who takes the actions to get the CEMA through.
So, where are people seeing the best rates? Best to use a broker?
Also, what's the minimum amount of time you have to hold a mortgage before you refinance via a CEMA?
Hello, mortgage broker here. First and foremost, do remember that you can at any time cancel the loan process without penalty. If the propert is your primary residence then you have three days to rescind the loan after closing.
That said the reason the GFE includes the transfer tax is in case your present bank cannot find the note or for whatever reason a CEMA can't be done and the borrow still wants to proceed with the loan, then if the transfer tax is not listedon the original GFE, then the lender or mortgage broker will be responsible to pay the tax. These are new regulations of the Dodd Frank law.
As far as doing a refinance, Chase doesn't necessarily have the lowest rates.
E.S. Funding Co.
wells fargo, 30 year fixed, no points, non jumbo 3.5%
closed a couple weeks ago.
Mellon. 1.7% 30-year fixed, jumbo.
1. a friend of mine wants to buy a condo that needs gut renovation
2. he intends to renovate it after closing so it wont have a C of O at closing
3. he will be putting 45% of purchase price down
4. will your lenders do a conventional loan for him
5. if so, on what rates
6. you can e-mail me if you prefer, at email@example.com