Jun 8, 2012

Tip 23-2012: Significant Changes to "Refinance" Recording Costs

Charlottesville Real Estate Attorney

Tip 23-2012: Significant Changes To Refinance Recording Costs Start July 1st
Effective July 1, 2012, Virginia is reducing the recording costs for the refinance of any existing debt, but the recording costs exemption many previously enjoyed is also being eliminated. 

The current recording cost for a Deed of Trust is $3.33 per $1,000.00 of the loan amount (ex. $100,000 Deed of Trust cost $333.00 to record.)  If the new loan was a refinance of an existing loan with the same lender, then there was no recording cost up to the amount of the existing Deed of Trust (ex. A refinance with Bank A of an existing $100,000 Deed of Trust, also with Bank A, would not incur any recording tax.) 

As of July 1, any refinance of a borrower's loan (in other words, the loan is not to purchase the property) will be taxed at a rate of $2.40 per $1,000.00.  Accordingly, both $100,000 refinances described above will cost $240.00 in recording tax.  It does not matter who the original lender was, all that matters is that the loan is a refinance of an existing debt.

This is another reason to take advantage of the historic low interest rates by refinancing of borrower's current loan.  Not only can borrowers lower their monthly payment by taking advantage of a lower interest rate, but now they can save on the new recording costs of the refinance of an existing debt.  Once again, it's a great time to tell everyone to contact a local lender to refinance all of the residential and investment loans.

PS - If anyone is planning to refinance their loan with their current lender, you need to close and record by June 29, 2012 or your recording cost will increase significantly.
Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions, or visit our blog below for previous tips.  Thank you for allowing us to send you this email.    

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William D. Tucker, III   
Charlottesville, VA 434-973-7474 | Lake Monticello (Palmyra, VA) 434-589-3636  
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