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Mortgage fees for cash out refi ?

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#1

Posted 01-29-2012, 09:45 PM

magicka is offline

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Mortgage fees for cash out refi ?

Cash out refinance in New York

Im looking at a 15 yr, 3.25 of 170K that there will be $4800 in fees = 900 Lender, 400 appraisal, 3rd party charges 2700. Bank attorney 800.

Does that sound right or I am overpaying there? This is in NY State.

...and any suggestions for mortgage broker or bank to use now would be appreciated. Thanks!

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#2

Old

01-30-2012, 04:31 AM

dealgate L7: Teacher Member sinceDec 2005 Posts2,458 Reputation 565 Followers 0 + Give Rep	Careful with the cash out - this might be counted as income and subject to income tax. E finita la cuccagna Politics may not be the oldest profession but the results are the same.
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#3

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01-30-2012, 05:32 AM

magicka SlickWitch Original Poster Member sinceDec 2004 Posts346 Reputation 80 Followers 0 + Give Rep	Thank you for that input. i had not heard that before. how would something like that be determined? I've never heard of borrowed money being taxable like that? (of course it is New york state ) And any thoughts on the fees? Thanks! Last edited by magicka; 01-30-2012 at 05:54 AM..
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#4

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01-30-2012, 06:03 AM

tiedyed1 is offline

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Quote from magicka

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Cash out refinance in New York

Im looking at a 15 yr, 3.25 of 170K that there will be $4800 in fees = 900 Lender, 400 appraisal, 3rd party charges 2700. Bank attorney 800.

Does that sound right or I am overpaying there? This is in NY State.

...and any suggestions for mortgage broker or bank to use now would be appreciated. Thanks!

Hi,
NY closing fees do vary by County as you will incur NY State Mortgage Tax.
Cash out is NOT considered income as it is your equity.
I am going to PM you with some more details.
-Adam

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#5

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01-30-2012, 09:46 AM

magicka SlickWitch Original Poster Member sinceDec 2004 Posts346 Reputation 80 Followers 0 + Give Rep	Thanks, and I probably should note to anyone else who has input, that I am: in my primary residence. not looking to sell. just want to re-fi my paid for home for cash for home improvements and business purposes. Thanks again for any insights or suggestions!
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#6

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01-30-2012, 01:59 PM

tiedyed1 is offline

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Thanks, and I probably should note to anyone else who has input, that I am:

in my primary residence. not looking to sell. just want to re-fi my paid for home for cash for home improvements and business purposes.

Thanks again for any insights or suggestions! Smilie

Smilie

The only additional underwriting condition for a cash out transaction is a borrower letter of explanation for what the cash out will be used for. They just want to hear that you are not using the proceeds to purchase something else where the possibility of additional liabilities will be incurred.

The simple explanation of general home maintenance and personal investments is suficient.
-Adam

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#7

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02-01-2012, 03:49 PM

General Ghoul

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Quote from magicka

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:

Cash out refinance in New York

Im looking at a 15 yr, 3.25 of 170K that there will be $4800 in fees = 900 Lender, 400 appraisal, 3rd party charges 2700. Bank attorney 800.

Does that sound right or I am overpaying there? This is in NY State.

...and any suggestions for mortgage broker or bank to use now would be appreciated. Thanks!

For that loan amount, those fees are actually quite good. Rate does seem a little high, what will be the LTV of your loan?4

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Careful with the cash out - this might be counted as income and subject to income tax.

Cash out from a refinance has never counted as income, where did you come up with that?

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#8

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02-01-2012, 04:27 PM

dealgate is offline

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Quote from General Ghoul

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For that loan amount, those fees are actually quite good. Rate does seem a little high, what will be the LTV of your loan?4

Cash out from a refinance has never counted as income, where did you come up with that?

In certain situations it can such as cashing out and then selling the house. For most this would not be an issue since they have little equity, but the possibility exists. I almost ran into this situation as I moved less then a year after a refi with cash and this came up which is why I know about it.

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#9

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02-01-2012, 04:46 PM

tiedyed1 Old Hippy & Mortgage Pro Member sinceNov 2009 Posts391 Followers 6	dealgate, Upon a sale there are IRS Capital Gains tax guidelines (which is directly related to acquisition vs sales price, less improvents and standard deductions), but I cannot fathom how anyone would suggest that cashout proceeds are related to taxable income.
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#10

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02-02-2012, 03:33 AM

dealgate is offline

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dealgate,
Upon a sale there are IRS Capital Gains tax guidelines (which is directly related to acquisition vs sales price, less improvents and standard deductions), but I cannot fathom how anyone would suggest that cashout proceeds are related to taxable income.

I found this article below. Explains it a little.

http://www.homeloanbasics.com/art...cesTaxable

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#11

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02-02-2012, 10:04 AM

tiedyed1 is offline

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Quote from dealgate

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I found this article below. Explains it a little.

http://www.homeloanbasics.com/art...cesTaxable

Ah, the article is referring to any PROFITS from a cash out.
The article is a little confusing as the cash out you may receive from a cash out is not taxable; but if that money is used to make money then the income it may produce is taxable.

Of course you will have a tax liabilitiy for any capital gains, whether from the sale of a house, stock, etc.
Of course you will pay income tax if you have business income.

But cash out from a refinance is not taxable income; it is a loan against your existing equity on your home. What you do with that loan may result in future tax liabilities on the profits it may create.

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