Current New York mortgage rates have allowed many homeowners to refinance, and as a result, save money on their monthly mortgage obligations.
By using mortgage payment calculators, it’s become increasingly easy for borrowers to compare the terms of their present loans to see if refinancing is viable for them. It’s also become easy to access market predictions to solidify the timing of your refinance.
Current market forecast in New York
Many housing markets weren’t fully affected by the U.S. financial crisis until 2012, but New York experienced immediate deterioration. In 2008, the lowest point for New York state’s housing market, the median home value was $455,000, according to Zillow. Luckily, the market turned around quickly. In 2017, the median home value skyrocketed to $640,000. By 2018 the median home price is expected to reach $666,000.
By the end of 2017, The Mortgage Bankers Association and National Association of Realtors anticipate current mortgage rates to rise to an average of 4.7 percent and 4.6 percent, respectively, for 30-year fixed rate mortgages.
These two predictions will mean different things for different borrowers.
Are you trying to refinance for the lowest rate possible? Or can you get more out of a higher valuation of your home? If you secured a loan pre-2012 it’s likely your mortgage rate is higher than current refinancing rates in NY. If you can secure a new interest rate one percent or less than your current mortgage rate, you could save a great deal of money over the life of your loan.
Seeing as the market is set to rise, if you don’t need to refinance immediately, waiting to receive an appraisal in 2018 might enhance the refinancing products you’re eligible for. A higher valuation may also allow you to rid yourself of PMI if you’re currently paying insurance.
If refinancing is for you, what are your options?
Borrowers can refinance at a variety of different loan lengths. 15, 20, and 30-year fixed rates in New York are popular products. 20-year refinance options are a happy balance of benefits between each of these options. With 20-year terms, you can pay the loan off quickly, like you would with a 15-year loan, but also receive lower rates than that of a 30-year mortgage.
A fixed-rate mortgage will generally come at a higher rate than a variable product. Even if a variable loan has lower interest now, a market change could cause problems down the road for variable rate loans. Market volatility can leave homeowners with Adjustable Rate Mortgages (ARMs) paying excessive interest payments. The Fair Housing Act (FHA), part of Housing and Urban Development (HUD), has a variety of options for homeowners. While most FHA loans service new home purchases, the department offers a few programs for refinancing as well.
If you’re nearing the end of your loan, plan to sell your home soon, or anticipate a windfall of cash, you might opt to go for an adjustable rate mortgage. The low initial interest can save you money, just remember the potential spike of interest after the fixed period of time associated with the loan.
Buying down points can also help a borrower save. Some lenders will offer a buyer the opportunity to buy down a half point, whole point, or even two points of the interest rate. Buying a whole point would reduce a note from 6 percent APR to 5 percent APR. A point being 1 percent of the loan value makes an $80,000 mortgage cost $800 per point. This saves thousands over the life of the loan.
Other refinancing costs borrowers should consider
Every loan will have closing costs of some kind to pay the brokers, underwriters, and others involved. Most no-closing-cost promotions will roll the closing costs and fees into the loan itself. Another method is the yield spread premium where a lender pays the broker costs in exchange for a higher-rate mortgage. Options like these can be an advantage for cash-strapped homeowners. However, the borrower paying costs upfront will not have to pay interest on those fees for the next 15 to 30 years.
It’s well-known that borrowers with bad credit scores usually receive higher interest rates. Those with the best credit ratings will qualify for the lowest rates and the best products. Have you taken appropriate measures you straighten your credit out before beginning the refinancing process?
Deciding with lender to use for your refinance
PNC Mortgage and Wells Fargo home mortgages are popular lenders for consumers. PNC offers flexible qualifying terms and takes into consideration non-traditional credit (like rent payments) to help borrowers qualify. Wells Fargo offers programs for existing customers to streamline their refinance process. There are a number of other regional banks to consider as well.
Local banks or credit unions also offer competitive products. Most credit unions are ‘not-for-profit’ which can translate into lower fees and more relaxed terms for borrowers.
If you don’t have the time or focus to properly research your options, a mortgage broker could be a great resource. Brokers charge a small fee for their services but have many connections in the lending world. By using someone who has connections to many refinancing options you can easily find a program that fits your financial situation and needs.
Last tip: New York mortgage payment calculators
It can be beneficial to speak with lenders after you’ve equipped yourself with a baseline of knowledge. What are your dream refi terms? Do you have an idea about the type of product you want to refinance with? The best way to answer these questions is with a mortgage payment calculator.
With a calculator, you can compare different loan lengths and interest rates then match your dream outcome to different lenders.
Mortgage rates in New York are among the lowest in the nation. Those seeking to reduce their monthly payments and save money over the long-term can compare rates between traditional banks and mortgage companies.
Back to Mortgage by Area