Refinance in New York

A mortgage loan isn’t permanent and a loan refinance can help adjust your term, interest rate or equity to meet your changing needs. Start with our guide to refinance in New York to learn more about the process and find a lender to help you refinance your mortgage. 

Refinance Calculator

Best Refinance Lenders in New York

From VA loan refinance options from Veterans United to the Quicken Loans® streamlined Rocket Mortgage® platform, you’ll find plenty of refinance choices in New York. Consider 1 of our recommended lenders below.

Current New York Refinance Rates

Interest rates will vary and depend on current market rates in your area. When you refinance a mortgage, you’ll lock into an interest rate that’s in line with today’s average rates.

Online mortgage lenders make it easy to track mortgage rates. Below you can view some examples of what you might pay for your refinance in New York today. If average market rates are lower than the rate you’re currently paying, now might be a great time to refinance. 

Refinance Process

Knowing what to expect before you refinance can make the process smoother. Let’s take a look at the basic steps you can expect when you decide to refinance your loan.  

Step 1: Decide Which Type of Refinance You Need

The 1st thing you’ll need to do when you decide to refinance is determine your refinance goals and type. There are 3 major types of refinances:

• Rate or term refinance. You can lengthen or shorten your loan term depending on your needs. When you refinance your interest rate, you’ll accept a rate in line with current market rates.
• Type refinance. You can also refinance to a new loan type. For example, many homeowners refinance an FHA loan into a conventional loan once they hit 20% equity.
• Cash-out refinance. A cash-out refinance is a unique type of refinance that allows you to access a portion of your home’s equity in cash. For example, if you have a mortgage loan with a balance of $200,000 and you need $10,000 to pay off debt, you might want to take a cash-out refinance to receive $10,000 in cash after closing. In exchange, you’d accept a mortgage loan with a principal balance of $210,000. 

Step 2: Choose Your Lender

There is no rule that says you must refinance your loan with your lender that gave you your original mortgage. If you aren’t satisfied with your current lender, you might want to refinance with a new company.

The best mortgage company for you will vary depending on your preferred application process, the type of loan you need and the interest rates offered. Don’t be afraid to take some time to research multiple lenders. 

Step 3: Apply For Your Loan

After choosing your lender, submit an application using the lender’s method. You can apply 100% online if you choose an online lender like Quicken Loans or Better.com. If you apply through a local lender, you may or may not need to visit a branch to complete your application.

Your lender will ask you for a few financial documents to prove your income, including bank statements and W-2s. If you’re self-employed, you’ll likely need to provide additional income verification. Most lenders will return a decision shortly after you apply for your refinance.  

Step 4: Lock In Your Rate

The best refinance mortgage companies allow you to lock in your interest rate while they complete underwriting. Most rate locks last between 15 to 60 days depending on the lender. If you want to lock your rate beyond this period, you may need to pay an additional fee.

You might also have the option to “float” your interest rate, which means allowing your rate to change as market rates change while your lender underwrites your loan. While floating may give you a lower rate if rates drop, it can also mean paying a higher rate if they rise. If you’re satisfied with the rate your lender returns to you, it’s usually a good idea to lock it in. 

Step 5: Appraisal and Underwriting

After you submit all of your documents, your lender will begin underwriting your loan. During underwriting, your lender will prepare your loan paperwork and verify your financial information. Most underwriting processes take place entirely behind the scenes.

Your lender will also schedule a new home appraisal. During your appraisal, a home value expert will visit your property and assign an estimated value. Unlike your original mortgage, you can be present for your appraisal this time around. Feel free to attend and point out any home improvements you made since you moved in.  

Step 6: Close On Your Loan

Once underwriting closes, your lender will send you a new Closing Disclosure with the final terms of your loan. After you acknowledge your Disclosure, your lender will schedule a closing meeting. At your closing meeting, you’ll sign on your new loan. If your lender owes you money (like in a cash-out refinance), you’ll receive it within 3 to 5 days after closing in most cases.  

When Should You Refinance in New York?

Refinancing can offer you a number of benefits, including:

• A lower monthly payment. If you can no longer afford your monthly payment, you might want to refinance to a longer term. Extending your loan’s term gives you more time to pay off your loan and lowers what you owe each month.

For example, if you owe $100,000 on your mortgage loan and have a 15-year term and a 3% interest rate, your monthly payment is $690.58. If you refinanced this amount to a 30-year term with the same interest rate, your monthly payment would be only $421.60.

• No FHA insurance. If you have an FHA loan, you must pay FHA insurance every month. Unlike the private mortgage insurance (PMI) required on some conventional loans, you can’t cancel your FHA insurance. But you can refinance your FHA loan to a conventional loan when you have 20% equity to avoid both FHA insurance and PMI.
• Save money in interest on debt. The average mortgage loan has an annual interest rate of 5% or less. When you compare the average mortgage loan interest rate to the average credit card interest rate (15% to 27% annually), there’s no question a mortgage is a more affordable way to borrow money.

If you have high interest debt, consider consolidating what you owe with a cash-out refinance. Taking a cash-out refinance to pay off credit card debt, student loan debt or another type of high interest debt can save you thousands by drastically lowering what you pay in interest. 

When Should You Not Refinance?

Refinancing isn’t the ideal solution for everyone. If any of the following apply to you, refinancing might not be right at this time.

• You don’t have much equity built. When your loan is new, most of your monthly payment goes towards accumulated interest. This means that you build equity slowly in the 1st few years of your loan. If your loan is new, you may not have enough equity to justify taking a cash-out refinance.
• You plan on moving soon. The longer you have your loan, the longer you enjoy the benefits of your refinance. If you plan on moving soon, you might end up paying more in closing costs on your refinance than you save.
• Interest rates are higher now. If interest rates are higher now than when you got your loan, your lender will usually require you to accept a higher rate. Know your current APR and track how local interest rates are changing over time before you commit to a refinance. 

Bad Credit Refinance

If you have bad credit, you might have a harder time getting a refinance. Your credit score is 1 of the 1st things that lenders check when you apply for a new loan. If your score is low, you’re statistically more likely to miss payments on your loan — which makes you a riskier candidate for a refinance.  

There are a few options you can use to refinance your loan’s rate or term when you have bad credit. Look into FHA streamline refinances or VA interest rate reduction refinance loans (VA IRRRLs). These loans allow you to refinance without a new appraisal or credit check. To qualify, you must:

• Already have an FHA loan or VA loan
• Have made your last 12 payments (FHA streamline) or 6 payments (VA IRRRL) on time
• See some kind of benefit like a lower monthly payment (FHA streamline only)
• Wait at least 270 days from the date you got your loan to the date you close on your refinance (VA IRRRL only)

If you don’t have an FHA or VA loan, consider refinancing with a non-occupying co-client on your loan. A non-occupying co-client is someone who doesn’t live with you but agrees to extend his or her credit to your refinance. If you fail to pay back your loan, your lender can pursue your co-client for the remaining balance. If you know someone who has excellent credit, you may want to ask him or her to sign onto your loan as a co-client.

Remember, you can only refinance your loan’s interest rate or term when you have a credit score below 620 points. If you want to take cash out of your home, you’ll need to meet credit requirements before you apply. 

Now is the Time to Refinance

If you think that now might be the right time to refinance your loan, begin researching lenders and loan options now. Just like you wouldn’t jump into a mortgage loan without knowing all of your options, don’t commit to a refinance until you’ve done your research. Take your time, track interest rates and speak with multiple lenders before you make the decision to apply.