Refinancing in New Jersey: fewer steps than the purchase, one bigger number.
No attorney review period, no realty transfer fee, no mansion tax. The number that surprises New Jersey homeowners is the property tax escrow, and it is the reason we run the cash-to-close estimate before the appraisal is ordered.
What is different about a New Jersey refinance
Attorney review does not apply
The three-business-day attorney review that New Jersey buyers go through is a feature of the purchase contract. A refinance has no purchase contract, so there is nothing to review and no waiting period on that account. Many homeowners still choose to have an attorney at closing, and some title agents require attorney involvement at settlement, so we confirm that with the title company at the start rather than the end.
No transfer fee, no mansion tax
Both are charged on deeds. A refinance records a mortgage, not a deed, so the fees that made the purchase closing expensive are absent. What remains is the lender's costs, title insurance, recording, and the escrow deposit.
The escrow deposit
New Jersey property taxes are paid quarterly and are high relative to most states. A new escrow account has to hold enough to pay the next quarter on time plus the cushion the servicer is allowed to carry, which is why the escrow line on a New Jersey refinance estimate can run to several thousand dollars. It is not a fee. The old servicer refunds the balance it was holding within weeks of payoff, and the two roughly offset.
Title insurance
New Jersey title agents can apply a reduced refinance rate when a prior policy exists on the property. It is worth asking for, and we do.
Which refinance fits
Rate-and-term, cash-out, dropping mortgage insurance, or an FHA or VA streamline. The refinance overview explains when each one makes sense. Our Hamilton office handles New Jersey files from application through closing.
Request a New Jersey refinance review
Three quick steps, no Social Security number. An officer from the Hamilton office runs the break-even and calls you back.
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New Jersey refinance questions.
Do I need an attorney to refinance in New Jersey?
Not by law. The attorney review period that New Jersey buyers know from purchase contracts applies to the sales contract, and there is no sales contract in a refinance. Many New Jersey homeowners still use an attorney at the refinance closing, and some title agents require one for settlement, so ask early and budget for it if so.
Is there a transfer fee or mansion tax on a refinance?
No. The New Jersey realty transfer fee and the so-called mansion tax are charged on deeds that convey property. A refinance records a new mortgage and does not convey the property, so neither applies.
Why is my escrow deposit so large?
New Jersey property taxes are among the highest in the country and are collected quarterly. A new escrow account has to be funded to the point where the next quarterly bill can be paid on time, which can mean several months of taxes collected at closing. The old lender refunds the escrow balance it was holding after payoff.
Written by Elmer Perez, Branch Manager, NMLS #2511063. General information, not tax or legal advice and not a commitment to lend.
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