Hi, I believe rates might have hit a bottom (a personal view obviously) and so am trying to re-finance my mortgage for my Manhattan co-op. Given I've never refinanced before I'm a little confused on just what the process is. 1) Do I need a real estate attorney (like I did for my original purchase closing)? 2) The closing of the original purchase took place at the office of my building mgt company.... [more]
Hi, I believe rates might have hit a bottom (a personal view obviously) and so am trying to re-finance my mortgage for my Manhattan co-op. Given I've never refinanced before I'm a little confused on just what the process is.
1) Do I need a real estate attorney (like I did for my original purchase closing)?
2) The closing of the original purchase took place at the office of my building mgt company. Is there a similar 'closing' for a re-fi? if not where/how does my original loan get paid-down and where/how do docs get signed?
3) How much should I budget for closing fees on a coop refi (assuming there is no NYS tax given its not a condo)?
4). I have gotten rates from Citi & Chase and while these aren't the cheapest rates they are still attractive from where I am today (for some reason I don't want to use a mortgage broker because I had a bad experience during my initial purchase). Are there any other banks that lend to Manhattan coops (just over $1m loan) that I should be calling?
thanks
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Response by front_porch
almost 16 years ago
Posts: 5316
Member since: Mar 2008
you're probably going to have to go through your board again for approval for the refi. So I would suggest that the first call you should make is to your managing agent to find out what the building's procedure is.
As far as a re-fi "closing" I think I did mine in Starbucks with someone from the bank, definitely without my atty.
ali r.
DG Neary Realty
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Response by bob420
almost 16 years ago
Posts: 581
Member since: Apr 2009
Try to get a long lock period!
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Response by NYmortgage
almost 16 years ago
Posts: 51
Member since: Dec 2009
1) You don't need your own attorney for a refinance, although you're more than welcome to have one present. There will be an attorney representing the bank that will be able to explain the documents to you.
2) There is indeed an actual closing that needs to take place, but it can be at the location of your choosing. The bank attorney will order a payoff statement from your existing lender and your payoff will be entirely coordinated for you. You will need to have board/management company approval however. Ask your management company for the refinance requirements in your building and they'll forward you a checklist.
3) Approximately $3,000 - 3,500.
4) It's certainly unfortunate that you had a bad experience last time around working with a broker, but you'll be leaving a lot of money on the table by only talking to the "too big to fail" banks. They are very competitive on the Fannie Mae eligible loans (< $729,750), but are miles away from the smaller savings and loans and portfolio lenders that mortgage brokers have access to for jumbo loans. As an aside, mortgage brokers don't cost you anything more than by going directly to the very same bank. Not only should a good broker be able to get you a far better jumbo rate, but they'll navigate the process for you and won't be beholden to some of the stricter new appraisal rules. Don't discount how important that is in this environment.
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Response by vicsing
almost 16 years ago
Posts: 21
Member since: Oct 2006
Thanks all for your comments. Very useful.
NYmortgage: My previous experience with a mortgage broker was being asked to pay for some costs that seemed high. In any case I'm willing to consider using a mortgage broker for my re-fi. Do you work for one? I have a ~$1.1m refi, 30-35% Equity, not taking any cash out.
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Response by gcondo
almost 16 years ago
Posts: 1111
Member since: Feb 2009
try schwab for a rate
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Response by gcondo
almost 16 years ago
Posts: 1111
Member since: Feb 2009
oh, and depending on how far into your current loan you are, it may not make sense to refinance... just an observation.
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Response by meagle
almost 16 years ago
Posts: 21
Member since: Apr 2008
my closing costs were much lower, i got a Making Home Affordable Program refinance.
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Response by shong
almost 16 years ago
Posts: 616
Member since: Apr 2008
vicsing - you will likely need coop approval. You dont need an attorney as someone mentioned above. The bank attorney will do the closing and it can be done at your home, in a coffee shop, in your hallway, you name it. Costs should be around 3k and you can either pay out of pocket or roll it into your loan amount. May I ask which coop this is for? sunny.hong@bankofamerica.com
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Response by gcondo
almost 16 years ago
Posts: 1111
Member since: Feb 2009
dont forget if you are more than a few years into your loan and you refinance, you will be paying mostly interest all over again. Nobody mentions this, especially those helpful mortgage brokers! So, while your montly payments will go down, the amount of principal you are paying off will also go down. Analyze carefully!
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Response by streetsmart
almost 16 years ago
Posts: 883
Member since: Apr 2009
As a mortgage broker, I always make my clients aware of the pros and cons of refinancing. I never charge an application fee or fee for credit.
Feel free to email me at esfundingco@aol.com
Independent Mortgage broker for almost twenty years.
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Response by REMom
almost 16 years ago
Posts: 307
Member since: Apr 2009
Try Wells Fargo, Bank of America, and Manhattan Mortgage Company.
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Response by NYmortgage
almost 16 years ago
Posts: 51
Member since: Dec 2009
meagle: Closing costs on MHAP refinances are entirely different than traditional refinances. Not only are they in limited supply, but they're only for loan amounts up $729,750.
vicsing: There should be no difference whatsoever. Unless you opted to pay points to buy-down your interest rate, you shouldn't have to pay more than that $3,000 - 3,500 estimate. At your LTV you should be able to handily beat the big banks by 50-100bps. And yes, I work at the largest Broker/Banker in Manhattan. Feel free to shoot me an email at NYCmortgage@gmail.com and we can discuss.
gcondo: Assuming a $1.0mm loan amount at 5.50%, you'll pay $44,815 in interest for the year for all of year 10. If you were to lower your rate by 1.00% on the same $1.0mm, you would pay $44,516 in interest in year 1.
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Response by vicsing
almost 16 years ago
Posts: 21
Member since: Oct 2006
Thanks all. After all the deliberation I'm going with local mortgage broker. They do have a large network of savings and community banks whose rates are much much much lower and my costs seem to be the same as if I went to a bank directly. Keeping my fingers crossed.
GCCondo: You got me thinking so I ran the numbers. There is almost a 1.50-1.75% difference in rates from where I am now so its almost a no-brainer to refinance. Also while my monthly pmts come down the interesting thing is that the Principal portion of my pmts actually go up slightly - so I'm building equity at a 'faster' rate than before.
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you're probably going to have to go through your board again for approval for the refi. So I would suggest that the first call you should make is to your managing agent to find out what the building's procedure is.
As far as a re-fi "closing" I think I did mine in Starbucks with someone from the bank, definitely without my atty.
ali r.
DG Neary Realty
Try to get a long lock period!
1) You don't need your own attorney for a refinance, although you're more than welcome to have one present. There will be an attorney representing the bank that will be able to explain the documents to you.
2) There is indeed an actual closing that needs to take place, but it can be at the location of your choosing. The bank attorney will order a payoff statement from your existing lender and your payoff will be entirely coordinated for you. You will need to have board/management company approval however. Ask your management company for the refinance requirements in your building and they'll forward you a checklist.
3) Approximately $3,000 - 3,500.
4) It's certainly unfortunate that you had a bad experience last time around working with a broker, but you'll be leaving a lot of money on the table by only talking to the "too big to fail" banks. They are very competitive on the Fannie Mae eligible loans (< $729,750), but are miles away from the smaller savings and loans and portfolio lenders that mortgage brokers have access to for jumbo loans. As an aside, mortgage brokers don't cost you anything more than by going directly to the very same bank. Not only should a good broker be able to get you a far better jumbo rate, but they'll navigate the process for you and won't be beholden to some of the stricter new appraisal rules. Don't discount how important that is in this environment.
Thanks all for your comments. Very useful.
NYmortgage: My previous experience with a mortgage broker was being asked to pay for some costs that seemed high. In any case I'm willing to consider using a mortgage broker for my re-fi. Do you work for one? I have a ~$1.1m refi, 30-35% Equity, not taking any cash out.
try schwab for a rate
oh, and depending on how far into your current loan you are, it may not make sense to refinance... just an observation.
my closing costs were much lower, i got a Making Home Affordable Program refinance.
vicsing - you will likely need coop approval. You dont need an attorney as someone mentioned above. The bank attorney will do the closing and it can be done at your home, in a coffee shop, in your hallway, you name it. Costs should be around 3k and you can either pay out of pocket or roll it into your loan amount. May I ask which coop this is for? sunny.hong@bankofamerica.com
dont forget if you are more than a few years into your loan and you refinance, you will be paying mostly interest all over again. Nobody mentions this, especially those helpful mortgage brokers! So, while your montly payments will go down, the amount of principal you are paying off will also go down. Analyze carefully!
As a mortgage broker, I always make my clients aware of the pros and cons of refinancing. I never charge an application fee or fee for credit.
Feel free to email me at esfundingco@aol.com
Independent Mortgage broker for almost twenty years.
Try Wells Fargo, Bank of America, and Manhattan Mortgage Company.
meagle: Closing costs on MHAP refinances are entirely different than traditional refinances. Not only are they in limited supply, but they're only for loan amounts up $729,750.
vicsing: There should be no difference whatsoever. Unless you opted to pay points to buy-down your interest rate, you shouldn't have to pay more than that $3,000 - 3,500 estimate. At your LTV you should be able to handily beat the big banks by 50-100bps. And yes, I work at the largest Broker/Banker in Manhattan. Feel free to shoot me an email at NYCmortgage@gmail.com and we can discuss.
gcondo: Assuming a $1.0mm loan amount at 5.50%, you'll pay $44,815 in interest for the year for all of year 10. If you were to lower your rate by 1.00% on the same $1.0mm, you would pay $44,516 in interest in year 1.
Thanks all. After all the deliberation I'm going with local mortgage broker. They do have a large network of savings and community banks whose rates are much much much lower and my costs seem to be the same as if I went to a bank directly. Keeping my fingers crossed.
GCCondo: You got me thinking so I ran the numbers. There is almost a 1.50-1.75% difference in rates from where I am now so its almost a no-brainer to refinance. Also while my monthly pmts come down the interesting thing is that the Principal portion of my pmts actually go up slightly - so I'm building equity at a 'faster' rate than before.