Comments on: "No Cost" Mortgage Refinance: Stepping Down the Ladder

By: LES

LES — Tue, 10 Jan 2012 16:23:43 +0000

@Denise – The company you are refinancing with now should have contacted a 3rd party to handle your CEMA paperwork for you. I suggest you ask them to put you in touch with one or reach out to one yourself.

By: Denise Lowry

Denise Lowry — Tue, 10 Jan 2012 13:39:44 +0000

I am in the process of refinancing my mortgage with the bank that currently holds the mortgage. The mortgage was just sold recently to the bank I am do the refi with. They are telling me the only way to avoid the transfer tax is to hire an attorney to do the CEMA paperwork. Why won’t they do it for me as I’m already paying and the reason why I went to them in the first place is because I was told I would save on some items do a refi with the same bank. Can you give me any information. I live in Westchester County, NY and the person I’m dealing with from Capital is in Texas.

By: LS

LS — Mon, 18 Oct 2010 20:20:04 +0000

@TFB

I believe this is called a mortgage recording tax.

From searching online, it looks like the following states. I know in New York State the rate varies by County as well.

Current states already charging it include Alabama, Florida, Georgia, Hawaii, Kansas, Maryland, Minnesota, New York, Oklahoma, Tennessee, and Virginia.

I was only able to avoid this fee by using the same lender since they most have some loophole to avoid having to record this again. This was annoying because at 1.05% (my State/County’s mortgage recording tax) this was too high an upfront cost for me to off-set with other lender’s lower mortgage rates at the time.

By: TFB

TFB — Mon, 18 Oct 2010 20:03:11 +0000

@LS – My state doesn’t have a mortgage tax for refinances. There’s a transfer tax on sales/purchases. Do you know which states have a mortgage tax?

By: LS

LS — Mon, 18 Oct 2010 19:52:39 +0000

Thanks for your insightful posts.

I was wondering how you were able to avoid paying your state’s mortgage tax when refinancing? When I refinanced, I was able to avoid paying my state’s mortgage tax because I refinanced through the same lender. Was it possible your state’s mortgage tax was covered in the closing costs by your lender or did your prior lender waive this cost for you? (which doesn’t seem to usually happen) Maybe your state doesn’t have a mortgage tax?

I did see rates that were slightly lower from other lender’s, but these lenders were unwilling to do the necessary paperwork to get my state’s mortgage tax waived.

By: TFB

TFB — Thu, 14 Oct 2010 03:11:06 +0000

@BKH – Yes to the first question. A common “claw back” period is four payments. If you refinance before you make four payments the previous originator get its fees clawed back by the investor. No to the second question. If you find a different originator, they don’t care about the loss of the previous lender.

By: BKH

BKH — Thu, 14 Oct 2010 02:59:44 +0000

I refinanced in Aug, but rates are already 0.375% lower. Is there any reason the mortgage lender I used would restrict the length of time between refinancing? For example, does the mortgage lender have to refund the fees paid to them by the bank who purchased the loan if the mortgage is refinanced within a certain time period? If I were to find another mortgage lender, would they have problems finding a bank willing to purchase the loan if my current mortgage is only a few months old?

By: TFB

TFB — Wed, 29 Sep 2010 22:58:23 +0000

Bengal – Sorry I know of no refi option that doesn’t require employment or income verification. I have not kept up with the loan modification process, which is different from a refinance.

By: Bengal

Bengal — Wed, 29 Sep 2010 20:02:52 +0000

Thank you TFB for your reply, I’m a young adult who’s helping my monolingual mom look into this refinancing bit. I don’t know anything about the house that she bought last year because it was all done by the real estate agent who doesn’t bother with translations or explanations and i was away at college. I’m sad to say that it is the case with most immigrant first-time homeowners such as our family – clueless. So the story is that whatever that agent did, she did it slyly enough so that my mom looks like she has a really profitable job, which she doesn’t, in order to get us a loan. And now, a year later, knowing that interest rates are at its lowest, we are afraid to talk about refinancing because we think that there’s no way around it since we are not able to duplicate what that agent did nor do we want to attempt it since most of the employment verification was probably exaggerated in the first place. So my final question is… is there any way to refinance without them having to verify my mom’s employment/income again? couldn’t they just base it on her current mortgage? or would our application still be considered even though my mom’s income bracket is the lowest of the low?

By: TFB

TFB — Wed, 29 Sep 2010 19:26:55 +0000

Bengal – The built-in option is the choice to prepay the principal balance in full without penalty. When interest rate goes down, the bank, as the owner of your mortgage, is deprived the enjoyment of receiving an above-market rate when you refinance and prepay. If the rate goes up, they are stuck with the below-market rate.

Options come in a two flavors: an option to buy something at a predetermined price is a “call option”; an option to sell something at a predetermined price is a “put option.”