The bank that holds the mortgage on my condo (Greenpoint) has gone out of business (acquired by North Fork / Capital One) and no longer does new loans and refinancings. I am thinking about refinancing my mortgage, but would like to know the mortgage tax implications of going with another lender. The following describes my situation: - remaining principal on my current mortgage is $A - I would like... [more]
The bank that holds the mortgage on my condo (Greenpoint) has gone out of business (acquired by North Fork / Capital One) and no longer does new loans and refinancings. I am thinking about refinancing my mortgage, but would like to know the mortgage tax implications of going with another lender.
The following describes my situation:
- remaining principal on my current mortgage is $A
- I would like to refinance and borrow $B
- $B > $A
If so, how much mortgage tax would I have to pay when I take out the new loan?
i. mortgage tax will be based on $B
ii. mortgage tax will be based on ($B - $A)
I hope I can avoid paying mortgage tax on the whole amount since that would be equivalent to taking out yet another cash advance on a hefty sum of money, but then again, maybe that's why people buy co-ops in NYC and save themselves a lot of transaction costs.
Any experts out there know the answer?
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Thanks, Steve. I took a look at the .pdf on this site but it didn't address my specific use case. It mostly talked about wraparound mortgages, so I am still unclear on the tax implications of refinancing.
I am assuming a worst case scenario in which my bank doesn't agree to assign the mortgage to another lender.
Any other suggestions?
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Response by shong
almost 18 years ago
Posts: 616
Member since: Apr 2008
You can do a CEMA (consolidation extension modification agreement). This will save you money on the mortgage tax you already paid. You will pay mortgage tax only on the borrowed money. Of course your current mortgage holder has to agree to this assignment. But in this case Im pretty sure that your lender does. sunny_hong@countrywide.com
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Response by aptometrist
almost 18 years ago
Posts: 88
Member since: Jul 2008
Thanks, shong. I guess this means that in order to avoid paying mortgage tax on the amount I have already borrowed once, I will have to get my current lender to agree to an assignment.
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Response by front_porch
almost 18 years ago
Posts: 5324
Member since: Mar 2008
Warning: banks are slow. I feel like my mortgage broker managed to perform a CEMA during a refi (in oh, 2004 maybe?) and it took three to four weeks.
ali r.
[downtown broker}
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Response by dledven
almost 18 years ago
Posts: 198
Member since: May 2008
the fastest CEMA is going through an attorney that is approved by both lenders this way its only one attorney working on the consolidation. If you have to use two attorneys then the process can take forever. I would definetly contact your mortgage broker/banker and check with him. Banks are very strict and usually have approved CEMA bank attorneys. If you need any assistance or have any other questions feel free to contact me. Daniel.
http://www.nyc.gov/html/dof/html/property/property_rec_mortgage.shtml
Thanks, Steve. I took a look at the .pdf on this site but it didn't address my specific use case. It mostly talked about wraparound mortgages, so I am still unclear on the tax implications of refinancing.
I am assuming a worst case scenario in which my bank doesn't agree to assign the mortgage to another lender.
Any other suggestions?
You can do a CEMA (consolidation extension modification agreement). This will save you money on the mortgage tax you already paid. You will pay mortgage tax only on the borrowed money. Of course your current mortgage holder has to agree to this assignment. But in this case Im pretty sure that your lender does. sunny_hong@countrywide.com
Thanks, shong. I guess this means that in order to avoid paying mortgage tax on the amount I have already borrowed once, I will have to get my current lender to agree to an assignment.
Warning: banks are slow. I feel like my mortgage broker managed to perform a CEMA during a refi (in oh, 2004 maybe?) and it took three to four weeks.
ali r.
[downtown broker}
the fastest CEMA is going through an attorney that is approved by both lenders this way its only one attorney working on the consolidation. If you have to use two attorneys then the process can take forever. I would definetly contact your mortgage broker/banker and check with him. Banks are very strict and usually have approved CEMA bank attorneys. If you need any assistance or have any other questions feel free to contact me. Daniel.