Refinancing in New York has a cost most investors elsewhere never see: the mortgage recording tax. When the goal is simply to replace a short-term or expiring loan, how the new mortgage is recorded can matter almost as much as the payment itself.
In short: LendingStreet refinances 1-8 unit rentals in Albany and across the Capital Region into DSCR loans that pay off hard money, bridge loans, balloon notes or an existing mortgage, qualified on rent with no tax returns. Rate-and-term refinances go up to 80% LTV on some programs, 30-year terms are available, the standard minimum DSCR is 1.0x and the minimum credit score is 620.
Local investors usually come to us with one of a few loans that are nearing their end.
Each of these loans has a date attached. The refinance is about replacing that date with a long-term, fully amortizing payment the rent can support.
This example is illustrative and not a quote. An investor renovated a two-family in Schenectady and owes $214,000 on an interest-only rehab loan, paying about $2,051 a month. The property appraises at $300,000 and the units rent for $1,300 and $1,200, or $2,500 a month.
A rate-and-term DSCR loan of $220,500 pays off the rehab loan plus about $6,500 in closing costs, about 74% of value. Estimated principal and interest is about $1,540. With taxes of about $550 and insurance of $190, the payment is about $2,280, for a DSCR of about 1.10x.
The monthly payment changes modestly, but the maturity deadline disappears and the balance starts to amortize.
| Item | Rehab loan | DSCR refinance |
|---|---|---|
| Loan balance | $214,000 | $220,500 |
| Monthly loan payment | $2,051 interest only | $1,540 principal and interest |
| Taxes and insurance | $740 | $740 |
| Total monthly payment | $2,791 | $2,280 |
| Mortgage tax charged on | Already paid | $220,500, or about $6,500 if consolidated |
Every new mortgage recorded in New York is generally subject to the mortgage recording tax. On a rate-and-term refinance, where the new loan is close to the old balance, a consolidation structure (often called a CEMA) can mean the tax applies mainly to any new money rather than the full balance.
This only works when the existing lender agrees to assign its mortgage and the new program allows it. Private and hard money lenders vary in how they handle assignments. Ask at the start, and have your attorney compare the costs.
If consolidation is not possible, the full recording tax on the new loan is part of your closing costs. Run the numbers both ways and decide whether the refinance still makes sense before you order the appraisal.
Appraisers here compare your property with nearby two- and three-family sales, which vary widely in condition. Give the appraiser a list of improvements, permits and photos, especially for systems that are hard to see, like a new boiler, electrical service or roof.
If unit counts changed during the renovation, have the permits and certificate of occupancy ready.
Appraisals in Troy, Albany and Schenectady can come in differently even a few blocks apart. Ask your agent or attorney for recent sales of similar buildings so your expectations match the market.
A rate-and-term refinance pays off existing debt and closing costs with little or no cash back, and it allows up to 80% LTV on some programs. A cash-out allows up to 75% LTV and returns equity to you, but it creates a larger new mortgage, and a larger recording tax.
If your goal is only to replace a maturing loan, rate-and-term is usually simpler and cheaper.
A rate-and-term refinance can also lower the payment when rents have risen and the existing loan was sized for a short-term project rather than a long hold.
Current rental permits help the refinance go smoothly. Albany registers and inspects rental units, and Troy and Schenectady have their own registration rules.
Use your actual county, city and school tax bills in your estimate. Reassessments can change those numbers, and a tax increase directly lowers the DSCR.
If you are refinancing a building that you bought with tenants in place, have the leases, rent ledgers and any rent increase notices ready. New York's tenant protections and local rules affect what rent you can collect, and underwriters will want to see it documented.
Start well before the existing loan matures. Attorney-handled closings, title searches and appraisals in New York can take several weeks, and winter weather can slow inspections.
Seasoning rules vary by program. Some look at how long you have owned the property, others at how long the current loan has been in place.
If your existing loan matures in winter, plan even further ahead. Appraisers and inspectors can be slower in bad weather.
Plan the timeline around your attorney's schedule too.
We need the leases, proof of rent, the payoff statement, insurance, recent tax bills and entity documents if the property is in an LLC. We do not need tax returns or pay stubs.
If the existing lender may assign its mortgage, ask them early for their requirements and fees.
Your attorney will also need the existing mortgage documents if a consolidation is being considered.
See our New York rate-and-term page for statewide notes. Call (877) 298-1001 or use the form below.
Include the current payoff letter and maturity date so we can plan the timeline.
Yes. The new loan pays off the rehab balance and closing costs and qualifies on the property's rent.
Up to 80% LTV on some programs. Larger balances and 5-8 unit properties can have lower limits.
It is a New York structure that consolidates the existing mortgage into the new one so the recording tax applies mainly to new money. It requires the existing lender's cooperation and a program that allows it.
A signed lease helps and some programs require it. Others use the appraiser's market rent estimate.
Several weeks is typical, because attorneys, title and the appraisal all take time. Start before your current loan matures.
Yes. Replacing a balloon or rate-reset loan with a 30-year DSCR loan is a common use.
No. Qualification is based on rent, credit and reserves.
With five or more properties, a blanket portfolio loan can combine them into one loan with one payment.
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