A converstation revolved around mortgages and mortage tax at a recent seminar I attended. It also came up with a situation at my bank.

If you have a non-revolving loan for $100,000 secured by a real Estate Mortgage in Oklahoma and the loan pays down to $25,000: the customer comes in to refinance and borrow funds back to the original $100,000. I have always been under the assumption that the $75,000 is considered new money and mortgage tax must be paid again for the proper period of time.

In one case, an adddtional loan was granted for the $75,000 (cross-pledged by language in the collateral description) and the origianl mortgage was relied upon and still considered a first lien. No new mortgage or modification was filed.

Some, that I have talked to, beleive that if you have a mortgage for $100,000 you can continue to advance back up and cross-pledge new loans without modfying and paying mortage tax on funds "re-advanced". I thought this was only allowable on revolving lines described within the mortgage.

Any and all input is appreciated.

Thanks

I would call a local title comany to be sure, but my understanding is that when you pay mortgage tax you are covered for the term you paid.

Oklahoma tax is based on the maturity and calculated on less than 2 years, 3-5 years (I think) and so on.... Sorry for not being more specific. I don't have any of my tax tables with me.

I contacted an attorney.

I understand the tables and how to calculate the tax. My concern was a practice of relying upon the tax paid on the origial debt when new money is advanced.

His confirmation is as follows:

You have a mortgage for $100,000 on a note that is non-revolving and you pay the maximum tax due (in this case lets say the mortage term was more than 5 years and the max was paid).

Customer comes in on year three and his balance has been paid to $75,000. He needs to borrow funds to put in a swimming pool and wants to refinance said loan back up to $100,000. The $25,000 re-advacned is now considered new debt and new money therefore, mortgage tax is due on the $25,000 for the new term. Mortage tax on the remaining $75,000 has already been paid.