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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13605
Experience:  15years with H & R Block. Divisional leader, Instructor
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Im looking to refinance my home and one lender said that my

Resolved Question:

I'm looking to refinance my home and one lender said that my closing cost is 13K while an other lender said that he can tap into my taxes paid 4 yeard ago when I first brought the house and reduce my closing cost to 9K. How is this possible is legal?
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.

Hello queensny,

 

Without additional information on just what the lender means by "tapping in to taxes you paid 4 years ago" it would be difficult to answer your question.

 

Did they give you any clue of what they mean by this?

 

 

Customer: replied 7 years ago.

They mean that since I paid state mortgage tax on my property only 4 years ago, he can use this tax already paid to reduce my refinance state mortgage tax.

Expert:  Merlo replied 7 years ago.

Thank you for the additional information. I will post your question on the board to see if someone knows the answer.

 

 

Customer: replied 7 years ago.
ok
Expert:  Robin D. replied 7 years ago.
HelloCustomer
Under New York law, a mortgage recording tax must be paid when a new mortgage is created and recorded on a property.
In many cases, however, a homeowner may be able to avoid the mortgage recording tax on a refinance if the original lender and the new lender cooperate.

Instead of satisfying the old mortgage from the proceeds of the new mortgage, the owner may be able to arrange for the original lender to assign — or transfer — the remaining balance on the old mortgage to the new lender. The new lender and the owner would then sign an agreement to recast the assigned mortgage to reflect the new mortgage terms. Because the old mortgage is not being satisfied, but simply assigned, no new mortgage debt is created. Therefore, no recording tax would apply.
Ask the lender if this is what he is doing. Hope this information is helpful,
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13605
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and other Tax Specialists are ready to help you