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Tuesday, June 9, 2009

Re-Fi Trial Balloon Taking Flak

Last week, Governor John Lynch sent up a trial balloon about applying the state's Real Estate Transfer Tax to any homeowner who refinancing a mortgage. In today's Union Leader, Kurt Strandson tries to shoot it down:

Gov. Lynch's proposal for a 1 percent to 1.5 percent tax on refinanced mortgages, including home equity lines, is the most counterintuitive idea possible to these efforts. It demonstrates how out of touch he is with the people of New Hampshire and their current situation. In addition, it is a poor economic policy.

When people are able to lower their monthly mortgage payment, the money they save goes right back into the state's economy when they spend it on bills and necessities. If the governor has his way, a couple refinancing a $200,000 mortgage will have to pay a $2,000 refinancing tax at closing, in addition to the current rising costs to refinance. Homeowners may not be able to complete the transaction because they don't have the cash to pay that tax. That could potentially cause foreclosure.

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