Each person seeking a mortgage at MortgageDepot presents us with a unique set of financial circumstances. MortgageDepot’s Loan Processor Irina Olivieri recently explained in depth how closing a mortgage refinance in certain instances can become very complicated. In New York state clients can obtain a Consolidation, Extension and Modification Agreement, or what is called a CEMA loan when they are looking to refinance their mortgage loan.
A CEMA loan is attractive because clients only have to pay taxes on the amount of the new loan that is above and beyond their current unpaid principal balance, such as closing costs or cash out. CEMA loans are only available on conventional, jumbo and FHA refinances. VA loans are not available.
The CEMA loan can help to reduce the amount of money a borrower pays in New York state mortgage taxes. CEMA can save you a lot of money on a refinance in New York State. Most clients looking for cost-effective refinancing should find that a CEMA loan makes perfect sense. However, it’s vital to know what to expect in terms of fees and closing times.
One thing to note is that CEMA loans have some additional fees involved that could make it less advantageous to some borrowers. Fees vary for individual loans but can range anywhere from a few hundred dollars to a few thousand dollars. These fees typically cover CEMA assignment fees, closing fees, and processing fees.
Although CEMA can save you money in most cases, it isn’t the quickest process. The state of New York and any previous lender must sign off to get the mortgage and title transfers processed under CEMA regulations, allowing you to pay taxes only on the new money in the transaction rather than the full principal balance. Understand that any CEMA refinance is going to require more patience than your average refinance. It may take anywhere between 60 and 90 days to close your loan. However, they’ll keep you updated throughout the process. If for some reason you need your loan to close quickly, you can take a look at regular refinances. Just be aware that you could pay additional taxes in exchange for that speed.
New York homeowners can get CEMA refinancing now at MortgageDepot today! If you’d prefer to get started over the phone, you can talk to one of our Mortgage Loan Officers by calling (718)268-9000.