Despite Low Interest Rates, Few Refinancings in New York
With long-term interest rates bouncing around near record lows for the last several months, it’s been a great time for home owners to refinance–unless they live in New York, that is. According to stats from Inside Mortgage Finance, while there were 92 percent more mortgage refinancings nationwide in the first quarter of 2009 versus the…
With long-term interest rates bouncing around near record lows for the last several months, it’s been a great time for home owners to refinance–unless they live in New York, that is. According to stats from Inside Mortgage Finance, while there were 92 percent more mortgage refinancings nationwide in the first quarter of 2009 versus the same period a year earlier, the increase in New York State was only a modest 6 percent. The reasons? First of all, New York has a lot of high-priced real estate, and the best rates are only available on conforming loans ($417,000 and under); if there’s enough equity in your house and your credit score is high enough, competitive rates are available for so-called agency-jumbo loans ($417,001 to $729,750). Secondly, New York State has a painfully high mortgage tax of 2.05 percent, and it’s become harder and harder to avoid in the case of refinancings. Has anyone refinanced a jumbo or agency-jumbo loan in the last few months? What kind of rates and fees did you encounter? What are the best banks to go to in this category?
New Yorkers Miss Refinancing Spree [NY Times]
bklyndoug – what did you pay for closing costs (in total) to refinance?
Adam Dahill – is 4.875% still the current rate on a loan of $729K? Do you expect the rates to rise or fall going forward?
thanks!
I have clients that are cutting their payments by 1k per month. That is some serious savings.
Just refi’d my primary on an agency jumbo at 4.875% 30 year fixed with no points. the mortgage is for $729,750 which is the upper bound of the agency conforming level. had no trouble getting it done as we have $1MM in equity in the house per the latest appraisal and excellent credit. i think without this the rates tend to suffer. there were 3 banks that were offering to underwrite – astoria federal, suntrust and fifth third, all of which were found using a mortgage broker (which i highly recommend). did a CEMA with my old lender (Citi) to avoid the mortgage recording tax, also no problem but depends on the lenders in each case.
Yes, MTG tax can be circumvented by doing a CEMA. You still pay Mtg tax on any of the “new money” as well as additional closing costs for the lawyers and recording.
HSBC and Wachovia only allow a CEMA if you refinance with them. You are forced to use them and can not shop around to find the best deal. That is unless you don’t mind paying 1.8%
The new limits went into effect this past Friday.
Steve Austin- Most of the people refinancing did not do 80/20s. A lot of NY’s didn’t do 80/20 because their condos/coops would not allow them to. A great deal of the loans that I am refinancing are at 50%-60% Loan to Values. You would be suprised at the amount of equity in brownstone brooklyn. A lot of 1.4 – 2 million brownstones with loan amounts under 650k.
Not sure I agree that “loan limits, mortgage rates and taxes are irrelevant right now.” A lot of people in expensive markets are gonna benefit from low rates and rise in conforming amount. Would argue that small percentage of total homeowners impacted by recent purchases being low on equity. But begs question, what percentage of homeowners with mortgages bought in last 3 years? 20%?
On refi, going through this now. Conforming amount is 729 I believe. But for 2 fam it’s higher – ’bout $800. Slow process but will save a bundle.
I am in a waiting period to refi under new conforming amount of $729k – I already qualify but was told the exact “rules” for the new conforming loans should be ready this week so nothing can happen until then. Is that true?
Tax is only on the cash-out portion of a cash-out refi. If the loan amount of the refi is the same as the existing mortgage, there is no additional tax.
We refinanced in January (were able to pay down our jumbo into a conforming loan) and had no problem obtaining a CIMA (CEMA?) from Citi, our old bank. That’s the part of the article that confused me – has the CEMA situation changed since January/February?
Even though we avoided the mortgage tax w/ the CEMA, the closing costs were still way higher than what my sister is paying for her refi in California.
Loan limits, mortgage rates and taxes are irrelevant right now. You can’t refi if you don’t have equity. I suspect the large number of 80/20 loans that were commonplace in NYC will leave these same homeowners unable to refi for quite some time.