CEMA stands for Consolidation Extension and Modification Agreement, but you don't need to remember that. All you need to remember is that it's a way to dramatically reduce your Mortgage Recording Tax, which is often your largest closing cost. If you're financing 80% of the purchase, the Mortgage Recording Tax is about 1.5% percent of the purchase price. Essentially what happens in a CEMA is the seller transfers their mortgage principal to you and you avoid paying the Mortgage Recording Tax on that amount. You're not assuming their mortgage though. If they have a low interest rate, you're not going to get that. You're also not going to get any of their other terms. You're just avoiding the Mortgage Recording Tax on that amount of principal. So what needs to happen in order for a CEMA to work? The first is you need to be buying a condo or a house. If you're buying a co-op there is no mortgage recording tax so there's nothing to save on. Second, both the seller's old lender and your new lender need to be on board with the process. And finally, the seller needs to agree as well. And there are two main reasons why they might not. First, a CEMA takes a while so if they're in a rush to close they might not be interested. Also, so there are fees associated with CEMA, both on the seller side and your side. So in order to get the seller to agree, you often split the CEMA savings with them. So when does a CEMA make sense? If the seller doesn't have at least half $1M left on their mortgage. A CEMA probably doesn't make sense because of the associated time and expense. Obviously the larger the seller's mortgage, the more CEMA is going to make sense. At Yoreevo, we can help run through the CEMA math and we can also represent you in a transaction to save even more with a commission rebate for up to 2% of the purchase price on any property in New York City. For more information, check out our website or email me at james@yoreevo.com.