How is the intangible tax calculated on a new mortgage loan?

The intangible tax on a new mortgage loan is calculated by multiplying the amount of the new loan by a specified rate, which reflects the tax imposed on the privilege of borrowing money secured by real property. In this case, the calculation is .002 times the new loan amount. This means that for every dollar borrowed, the borrower incurs a tax of two-tenths of a percent.

Understanding this calculation is crucial for anyone involved in real estate transactions, as it directly impacts the closing costs for the buyer. Knowing the rate for the intangible tax allows buyers and real estate professionals to budget appropriately and ensures compliance with local tax laws related to mortgage financing.