How fair is this? Did you know that in New York, anyone obtaining a mortgage must pay a tax of 1.05% of the cost of the loan amount? Currently, a Dutchess County home-buyer who finances $300,000 is taxed $3,150, an amount which it typically added to the buyer's closing costs.
My source tell me that in other states throughout the United States, home buyers seeking mortgages through credit unions are not subjected to mortgage recording TAX. True or False? (Maybe some of the other Active Rain members will confirm).
And, how great would it be if home-buyers here in New York could avoid having to pay this tax too?
Well, perhaps buying a home in New York is about to become a little more affordable if the Hudson Valley Federal Credit Union is successful in a lawsuit filed in state Supreme Court. http://www.poughkeepsiejournal.com/article/20100326/NEWS05/3260328/Credit-union-files-suit-over-mortgage-tax
The lawsuit is based on claims by the credit union, that laws passed during the Depression, had previously established that not-for-profits are exempt from paying the mortgage recording tax. The State of New York is fighting back with claims that credit unions are not exempt from the mortgage tax because it does not involve tangible property, but rather it's a "privilege" to obtain a mortgage.
Since when is obtaining the The American Dream a privilege? I think most people would admit to working very hard to afford whatever housing options are available to them and any kind of shelter is a necessity, whether a rental unit, a property owned free and clear or a home that is mortgaged.
Many real estate professionals in the Hudson Valley wiill be watching this case closely. It's challenging enough for home-buyers these days to save for closing costs with the many ongoing and changing federal guidelines which have been imposed on the home lending business. It will finally be good news for a change to know that home-buyers might actually be able to "shave" money off their closing costs instead of being subjected to more and more out of pocket expenses associated with the purchase of a new home.
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