Refinance Transfer Tax



Answers
Answer #1

It is the County Land Records office that will determine this for your particular transaction. The tax in question on a refinance is .3334% of your loan amount.

The different counties view the need to charge this differently. It is only charged if your new lender is different than the owner of the current loan being refinanced. I understand that Fairfax County for example interprets this literally. If Bank X is on your Note and Deed of Trust as the Lender and your are again going through that same company for the refinance, on the face of it you would not be obligated to pay this tax because the old lender and new lender are the same.

However, behind the scenes, your lender might have sold the loan to Fannie Mae. Fannie Mae is now the owner of the current loan. Regardless what institution you obtain your new financing from, you will have to pay this tax because the lender is not Fannie Mae on the new loan. Fannie Mae does not lend directly to consumers.

I further understand that not all Virginia counties have adopted this interpretation so in some counties as long as the old lender on the Note/Deed of Trust is the same as the name on the new lender Note/Deed of Trust, then you might not have to pay. It comes down to your county land records office. Your settlement agent is the best source to see if you will be charged this or not. As a loan officer, I would disclose to you this taxes being charged as a worst case scenario. You won’t know 100% if it will or won’t be charged until your new loan is recorded in the county records.

If I can share any further information or offer you a comparison on the terms you are being offered on your Virginia Refinance, please give me a call at 301.517.5434.

Eric Strasser, NMLSR#111971
SunTrust Mortgage, Inc.

Answers Answered By: Eric-Strasser Level Ratingpoints
Answer #2

Eric is 100% correct. It’s strange the way it’s done in VA at times. I have one right now with the exact same situation. Even though they were considering going back to the same lender to save on the taxes they would not have in fact been exempt because the loan had been sold to Freddie Mac and someone else serviced the loan. I know it’s confusing, please let us know if you have any follow up questions or would like to compare rates.
Below is part of the exchange I had with the title company to make sure our facts were straight.

Good news – Citimortgage is NOT the Investor so she could NOT get the break on recording taxes in Fairfax County. Citimortgage is the servicer but FHLMC is the investor/noteholder. We had a case recently where a borrower was told by her old lender that they were still the noteholder but in fact were not and she then had to go back to them to try and collect the recording fees.

Thanks,

Brent Mendelson
Senior Loan Officer
Monarch Mortgage
600 Jefferson Plaza, Suite 400
Rockville, MD 20852
240-403-1970 Direct
301-412-0259 Cell
http://www.monarchmtg.com/bmendelson
nmlsr#111407

Answers Answered By: Brent Mendelson Level Rating133points

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