Maximize Your Savings with Our Purchase CEMA Calculator
A Purchase CEMA (Consolidation, Extension, and Modification Agreement) can help buyers and sellers save significantly on closing costs when transferring an existing mortgage. Our Interactive Purchase CEMA Calculator estimates your potential mortgage recording tax and transfer tax savings, giving you a clear picture of how much you and the seller can benefit.
Use this tool to see if a Purchase CEMA is right for you and how much you could save on your transaction.
How a Purchase CEMA Works
In a standard real estate transaction, buyers pay a mortgage recording tax, and sellers pay a transfer tax on the full loan amount. However, with a Purchase CEMA, the buyer assumes the seller’s existing loan balance rather than originating a new loan, reducing the taxable mortgage amount. This results in substantial savings for both parties.
Our calculator breaks down your mortgage recording tax and transfer tax savings with and without a Purchase CEMA, allowing you to compare the financial benefits.
Purchase CEMA Calculator: Key Inputs
- Sale Price: The agreed-upon selling price of the property.
- Outstanding Seller Loan Principal: The remaining balance on the seller’s mortgage, which will be assumed by the buyer in a Purchase CEMA transaction.
- Buyer Loan Size: The total mortgage amount the buyer plans to take out. If larger than the seller’s outstanding loan, only the assumed portion qualifies for savings.
- Property Type: The type of property being purchased, which affects applicable mortgage recording taxes and transfer taxes.
- Condo: Eligible for Purchase CEMA savings.
- Co-ops & Single-Family Homes: Typically not eligible for Purchase CEMA.
- CEMA Savings Split (%): A negotiable percentage that determines how the mortgage recording tax and transfer tax savings are shared between the buyer and seller. Typically split 50/50, but terms vary based on negotiations.
Understanding the Purchase CEMA Savings Breakdown
Buyer Mortgage Recording Tax
- Without Purchase CEMA: The full mortgage recording tax is applied to the total buyer loan amount.
- With Purchase CEMA: The tax is only applied to the portion of the loan exceeding the seller’s outstanding balance.
Mortgage Recording Tax Savings
- The difference between the mortgage recording tax with and without a Purchase CEMA.
- This represents the buyer’s primary tax savings.
Seller Transfer Tax
- Without Purchase CEMA: The seller pays the full NYS Transfer Tax on the sale price.
- With Purchase CEMA: The seller pays transfer tax only on the newly financed portion, reducing their tax liability.
NYS Transfer Tax Savings
- The amount the seller saves on New York State Transfer Tax by structuring the sale as a Purchase CEMA transaction.
Total Purchase CEMA Savings
- The combined savings from mortgage recording tax reductions (buyer) and transfer tax reductions (seller).
CEMA Attorney Fees
- Legal fees for executing a Purchase CEMA agreement, which vary by lender and law firm.
- While these costs must be factored in, the net savings often outweigh the additional expense.
Net Savings
- The total benefit of using a Purchase CEMA after accounting for attorney fees.
- Provides a clear financial comparison to a standard transaction.
Who Benefits from a Purchase CEMA?
- Buyers: Reduce mortgage recording tax, particularly valuable in high-loan transactions.
- Sellers: Lower NYS Transfer Tax, increasing their net proceeds.
- Both Parties: Share savings through negotiable CEMA splits, making the transaction more attractive.
A Purchase CEMA is most beneficial for high-value condo purchases in New York City, where mortgage recording tax and transfer tax can add substantial costs to a transaction.
Estimate Your Savings with Our Purchase CEMA Calculator
Use our Interactive Purchase CEMA Calculator to determine if this tax-saving strategy works for your transaction. Simply enter your sale price, loan amounts, and property type, and we’ll calculate the potential savings for both buyer and seller.
Want expert guidance?
Contact Byson Real Estate Co. to discuss whether a Purchase CEMA is the right strategy for your transaction!
