transfer tax on refinance

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Topic Author
woldemariam
Posts: 24
Joined: Wed Aug 31, 2016 3:00 pm

transfer tax on refinance

Post by woldemariam » Thu Feb 13, 2020 6:51 pm

HI Bogleheads,

I am in the processes of picking a lender for a refinance. From what I know, there shouldn't be a transfer tax on a no cash refi. Both Better.com and Lendefi show the transfer tax on the estimates. Aimloan.com estimate is accurate; no transfer tax on a no cas refi and a transfer tax if I chose to do a cash out. I got on the phone with better.com and they are saying as far they know there will be a transfer tax. This was their response:
"The subject property is located in Prince George's County, (Maryland) . It appears that there is a transfer tax on the new loan that is being borrowed. However, the client can contact their attorney/title company to determine if they would meet the refinance exemption. This is outside of Better's determination. "
The guy on the phone said he cannot remove it from the estimate but it could be removed during underwriting. Does anyone know if this accurate?

Admiral
Posts: 2790
Joined: Mon Oct 27, 2014 12:35 pm

Re: transfer tax on refinance

Post by Admiral » Thu Feb 13, 2020 8:18 pm

woldemariam wrote:
Thu Feb 13, 2020 6:51 pm
HI Bogleheads,

I am in the processes of picking a lender for a refinance. From what I know, there shouldn't be a transfer tax on a no cash refi. Both Better.com and Lendefi show the transfer tax on the estimates. Aimloan.com estimate is accurate; no transfer tax on a no cas refi and a transfer tax if I chose to do a cash out. I got on the phone with better.com and they are saying as far they know there will be a transfer tax. This was their response:
"The subject property is located in Prince George's County, (Maryland) . It appears that there is a transfer tax on the new loan that is being borrowed. However, the client can contact their attorney/title company to determine if they would meet the refinance exemption. This is outside of Better's determination. "
The guy on the phone said he cannot remove it from the estimate but it could be removed during underwriting. Does anyone know if this accurate?
This may be of some help. Note it is from 2013.

https://www.jgllaw.com/blog/marylands-r ... -borrowers

Topic Author
woldemariam
Posts: 24
Joined: Wed Aug 31, 2016 3:00 pm

Re: transfer tax on refinance

Post by woldemariam » Sat Feb 15, 2020 8:43 am

Thank you Admiral. The folks at better.com seem to be clueless. Lenderfi confirmed for me that I won't have to pay transfer tax. No explanation given as to why it shows transfer tax when it does not apply.

need403bhelp
Posts: 860
Joined: Thu May 28, 2015 6:25 pm

Re: transfer tax on refinance

Post by need403bhelp » Sat Feb 15, 2020 12:09 pm

woldemariam wrote:
Thu Feb 13, 2020 6:51 pm
HI Bogleheads,

I am in the processes of picking a lender for a refinance. From what I know, there shouldn't be a transfer tax on a no cash refi. Both Better.com and Lendefi show the transfer tax on the estimates. Aimloan.com estimate is accurate; no transfer tax on a no cas refi and a transfer tax if I chose to do a cash out. I got on the phone with better.com and they are saying as far they know there will be a transfer tax. This was their response:
"The subject property is located in Prince George's County, (Maryland) . It appears that there is a transfer tax on the new loan that is being borrowed. However, the client can contact their attorney/title company to determine if they would meet the refinance exemption. This is outside of Better's determination. "
The guy on the phone said he cannot remove it from the estimate but it could be removed during underwriting. Does anyone know if this accurate?
For better.com, I would contact the title company on the lender estimate to ask about all fees involved. I had a somewhat similar issue with my loan estimate from them about an incorrect title insurance amount (mandated by my state) and basically it is not adjusted until close to closing; however, their title company should be able to verify the closing costs.

The other thing is you can actually get an advantage with the better price guarantee if you have a loan estimate from another lender that shows the transfer tax that you won't actually pay. When beating the loan by $1,000, they'll take the transfer tax into account when calculating their lender credit, but when you actually close if you really aren't required to pay it your closing costs will be a $1,000 cheaper. Just FYI.

seawolf21
Posts: 374
Joined: Tue Aug 05, 2014 7:33 am

Re: transfer tax on refinance

Post by seawolf21 » Sat Feb 15, 2020 5:15 pm

need403bhelp wrote:
Sat Feb 15, 2020 12:09 pm
woldemariam wrote:
Thu Feb 13, 2020 6:51 pm
HI Bogleheads,

I am in the processes of picking a lender for a refinance. From what I know, there shouldn't be a transfer tax on a no cash refi. Both Better.com and Lendefi show the transfer tax on the estimates. Aimloan.com estimate is accurate; no transfer tax on a no cas refi and a transfer tax if I chose to do a cash out. I got on the phone with better.com and they are saying as far they know there will be a transfer tax. This was their response:
"The subject property is located in Prince George's County, (Maryland) . It appears that there is a transfer tax on the new loan that is being borrowed. However, the client can contact their attorney/title company to determine if they would meet the refinance exemption. This is outside of Better's determination. "
The guy on the phone said he cannot remove it from the estimate but it could be removed during underwriting. Does anyone know if this accurate?
For better.com, I would contact the title company on the lender estimate to ask about all fees involved. I had a somewhat similar issue with my loan estimate from them about an incorrect title insurance amount (mandated by my state) and basically it is not adjusted until close to closing; however, their title company should be able to verify the closing costs.

The other thing is you can actually get an advantage with the better price guarantee if you have a loan estimate from another lender that shows the transfer tax that you won't actually pay. When beating the loan by $1,000, they'll take the transfer tax into account when calculating their lender credit, but when you actually close if you really aren't required to pay it your closing costs will be a $1,000 cheaper. Just FYI.
Sections E to H are excluded from price match consideration. Transfer tax would be in section E.

At the end of the day, the settlement agent will include/exclude transfer tax based on whether it is applicable on not. So the OP doesn’t really have to worry about it even if listed on LE from better.com.

need403bhelp
Posts: 860
Joined: Thu May 28, 2015 6:25 pm

Re: transfer tax on refinance

Post by need403bhelp » Sat Feb 15, 2020 10:19 pm

seawolf21 wrote:
Sat Feb 15, 2020 5:15 pm
need403bhelp wrote:
Sat Feb 15, 2020 12:09 pm
woldemariam wrote:
Thu Feb 13, 2020 6:51 pm
HI Bogleheads,

I am in the processes of picking a lender for a refinance. From what I know, there shouldn't be a transfer tax on a no cash refi. Both Better.com and Lendefi show the transfer tax on the estimates. Aimloan.com estimate is accurate; no transfer tax on a no cas refi and a transfer tax if I chose to do a cash out. I got on the phone with better.com and they are saying as far they know there will be a transfer tax. This was their response:
"The subject property is located in Prince George's County, (Maryland) . It appears that there is a transfer tax on the new loan that is being borrowed. However, the client can contact their attorney/title company to determine if they would meet the refinance exemption. This is outside of Better's determination. "
The guy on the phone said he cannot remove it from the estimate but it could be removed during underwriting. Does anyone know if this accurate?
For better.com, I would contact the title company on the lender estimate to ask about all fees involved. I had a somewhat similar issue with my loan estimate from them about an incorrect title insurance amount (mandated by my state) and basically it is not adjusted until close to closing; however, their title company should be able to verify the closing costs.

The other thing is you can actually get an advantage with the better price guarantee if you have a loan estimate from another lender that shows the transfer tax that you won't actually pay. When beating the loan by $1,000, they'll take the transfer tax into account when calculating their lender credit, but when you actually close if you really aren't required to pay it your closing costs will be a $1,000 cheaper. Just FYI.
Sections E to H are excluded from price match consideration. Transfer tax would be in section E.

At the end of the day, the settlement agent will include/exclude transfer tax based on whether it is applicable on not. So the OP doesn’t really have to worry about it even if listed on LE from better.com.
Got it, thanks.

Sorry, I was thinking of the title insurance cost, which was taken into account by better.com (at least to my recollection without referencing the emails) in the better price guarantee despite being incorrect (not accounting for a large state provided discount for refinancing within a certain period of time after initial purchase) in their loan estimate, thus resulting in a significantly (~$1k) large room loan credit than they would have otherwise provided.

seawolf21
Posts: 374
Joined: Tue Aug 05, 2014 7:33 am

Re: transfer tax on refinance

Post by seawolf21 » Sun Feb 16, 2020 12:40 am

need403bhelp wrote:
Sat Feb 15, 2020 10:19 pm
seawolf21 wrote:
Sat Feb 15, 2020 5:15 pm
need403bhelp wrote:
Sat Feb 15, 2020 12:09 pm
woldemariam wrote:
Thu Feb 13, 2020 6:51 pm
HI Bogleheads,

I am in the processes of picking a lender for a refinance. From what I know, there shouldn't be a transfer tax on a no cash refi. Both Better.com and Lendefi show the transfer tax on the estimates. Aimloan.com estimate is accurate; no transfer tax on a no cas refi and a transfer tax if I chose to do a cash out. I got on the phone with better.com and they are saying as far they know there will be a transfer tax. This was their response:
"The subject property is located in Prince George's County, (Maryland) . It appears that there is a transfer tax on the new loan that is being borrowed. However, the client can contact their attorney/title company to determine if they would meet the refinance exemption. This is outside of Better's determination. "
The guy on the phone said he cannot remove it from the estimate but it could be removed during underwriting. Does anyone know if this accurate?
For better.com, I would contact the title company on the lender estimate to ask about all fees involved. I had a somewhat similar issue with my loan estimate from them about an incorrect title insurance amount (mandated by my state) and basically it is not adjusted until close to closing; however, their title company should be able to verify the closing costs.

The other thing is you can actually get an advantage with the better price guarantee if you have a loan estimate from another lender that shows the transfer tax that you won't actually pay. When beating the loan by $1,000, they'll take the transfer tax into account when calculating their lender credit, but when you actually close if you really aren't required to pay it your closing costs will be a $1,000 cheaper. Just FYI.
Sections E to H are excluded from price match consideration. Transfer tax would be in section E.

At the end of the day, the settlement agent will include/exclude transfer tax based on whether it is applicable on not. So the OP doesn’t really have to worry about it even if listed on LE from better.com.
Got it, thanks.

Sorry, I was thinking of the title insurance cost, which was taken into account by better.com (at least to my recollection without referencing the emails) in the better price guarantee despite being incorrect (not accounting for a large state provided discount for refinancing within a certain period of time after initial purchase) in their loan estimate, thus resulting in a significantly (~$1k) large room loan credit than they would have otherwise provided.
Agreed that if you have your own title company in mind and they are lower than better's vendor, do the price match first before telling better you have your own title company. That's exactly what I did during prior reifi. better's title cost were $2800. I had them price match lowest competitor from mortgage professor which had similar title costs. Once better matched and then further increased their lender credit by $1K, I told them I had my own title company from original purchase willing to do the title for $1,800. Essentially, better's offer became $2K lower than lowest competitor.

need403bhelp
Posts: 860
Joined: Thu May 28, 2015 6:25 pm

Re: transfer tax on refinance

Post by need403bhelp » Sun Feb 16, 2020 3:15 pm

seawolf21 wrote:
Sun Feb 16, 2020 12:40 am
need403bhelp wrote:
Sat Feb 15, 2020 10:19 pm
seawolf21 wrote:
Sat Feb 15, 2020 5:15 pm
need403bhelp wrote:
Sat Feb 15, 2020 12:09 pm
woldemariam wrote:
Thu Feb 13, 2020 6:51 pm
HI Bogleheads,

I am in the processes of picking a lender for a refinance. From what I know, there shouldn't be a transfer tax on a no cash refi. Both Better.com and Lendefi show the transfer tax on the estimates. Aimloan.com estimate is accurate; no transfer tax on a no cas refi and a transfer tax if I chose to do a cash out. I got on the phone with better.com and they are saying as far they know there will be a transfer tax. This was their response:



The guy on the phone said he cannot remove it from the estimate but it could be removed during underwriting. Does anyone know if this accurate?
For better.com, I would contact the title company on the lender estimate to ask about all fees involved. I had a somewhat similar issue with my loan estimate from them about an incorrect title insurance amount (mandated by my state) and basically it is not adjusted until close to closing; however, their title company should be able to verify the closing costs.

The other thing is you can actually get an advantage with the better price guarantee if you have a loan estimate from another lender that shows the transfer tax that you won't actually pay. When beating the loan by $1,000, they'll take the transfer tax into account when calculating their lender credit, but when you actually close if you really aren't required to pay it your closing costs will be a $1,000 cheaper. Just FYI.
Sections E to H are excluded from price match consideration. Transfer tax would be in section E.

At the end of the day, the settlement agent will include/exclude transfer tax based on whether it is applicable on not. So the OP doesn’t really have to worry about it even if listed on LE from better.com.
Got it, thanks.

Sorry, I was thinking of the title insurance cost, which was taken into account by better.com (at least to my recollection without referencing the emails) in the better price guarantee despite being incorrect (not accounting for a large state provided discount for refinancing within a certain period of time after initial purchase) in their loan estimate, thus resulting in a significantly (~$1k) large room loan credit than they would have otherwise provided.
Agreed that if you have your own title company in mind and they are lower than better's vendor, do the price match first before telling better you have your own title company. That's exactly what I did during prior reifi. better's title cost were $2800. I had them price match lowest competitor from mortgage professor which had similar title costs. Once better matched and then further increased their lender credit by $1K, I told them I had my own title company from original purchase willing to do the title for $1,800. Essentially, better's offer became $2K lower than lowest competitor.
Thanks. In my case, our insurance title costs are regulated by the state, and the additional fees charged by better.com's title company (~$250) are actually on par if not slightly better than other title companies in the area. However, for some reason, they don't communicate with the title company until the very end (they quoted the full title insurance cost although our state discounts it by ~50% for refinances of homes that were purchased within past several years) and so it ended up being ~$1k better for me, despite using their own title company. I also did contact their title company to clarify the discrepancy (I know the right answer as it is regulated by the state), and the title company very quickly confirmed the correct fees to me, so this is just a case of better saving on work up-front which, in my case, cost them some money.

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