New York City Real Estate | NYC, NYNew York City Real Estate | NYC, NYNew York City Real Estate | NYC, NYNew York City Real Estate | NYC, NY
  • ABOUT
    • ABOUT SCOTT
    • ABOUT THE TEAM
    • PRESS
  • BUYERS
  • SELLERS
  • VIDEOS
  • LISTINGS
  • JOIN OUR TEAM
  • BLOG
  • CONTACT
  • CALL SCOTT NOW

Adventures in refinancing and Rates Right Now

    Home Newsletter Adventures in refinancing and Rates Right Now
    NextPrevious

    Adventures in refinancing and Rates Right Now

    By admin | Newsletter | Comments are Closed | October 14, 2012 | 0

    There is no better way to understand your clients’ adventures with lenders than to be a borrower yourself.

    I took that to heart this month as I closed a refinance on an investment property.

    My learnings, especially compared to the perspective of purchasing investment property in 2006-2007, were as interesting as they were frustrating.
    This refinance was the third financing of a Brooklyn Heights property.

    Rates started in 2005 at 6.5% (5-yr interest-only), going to 6% (30yr fixed-rate loan) in 2006, followed by 4.875% (30-year fixed) in 2011, followed by 3.625% (20-year fixed-rate) in 2012.
    What changed this time?
     

    The underwriting jungle


    First, valuations have finally come back.

    Appraisers are finally giving better value numbers than they were last year.

    An increase in sales volume has helped, along with higher sales prices over the last 4 quarters.
    Second, underwriting is even worse.

    This iteration, beyond signing a form (4506) in which you declare that the lender can pull your tax return from the IRS, actually required our initialing every single page of 2 years’ of tax returns! Now we’re not Mitt Romney, but the return is more than 100 pages.
    Third a feeling of changing standards too many times along the way.

    The bank ran credit no less than 6 times in the 3 months it took to get a “clear to close” from the bank.

    Further, for the last 2 loans, the lender (Citi) already had the loan!!
    Fourth, Loan-to-Value has become a bit more reasonable.

    For investment property, the LTV (loan to value) allowed went to 75% from 70%, which was better than last year for many investors I represented.

    And with improving valuations, this means little to no out-of-pocket expenses for refinances.
    Fifth- technology has been helping (somewhat).

    Email and scanning seems to be much more part of everyone’s process, which alleviates faxing.
    Any buyer considering taking a mortgage (which over 90% in most parts of the country), especially in NYC, should expect an invasive process on top of the already invasive cooperative purchase process.

    However, the payoff is rates that are under 3.5% for primary residence, under $417,000, and still under 4% for jumbo loans.
    It’s a jungle out there, but it’s a cheap jungle.

    Condo sales, loan commitment, loan preapproval, mortgage rate, Mortgage Rates, NYC Real Estate, preapproval, super low rates

    NextPrevious

    Recent Blog Posts

    • VIDEO: No Supply Problems, No Demand Problems. It’s Only About Pricing. January 1, 2021
    • The Myth of the Desperate Seller – And Other Real Estate Fallacies December 25, 2020
    • Bottom of the Market, Part II – New York is Coming Back, Baby! December 25, 2020
    • Year Over Year: The Real Estate Recovery is WELL On Its Way December 9, 2020
    • VIDEO- Am I Really Calling the Bottom of the RE Market? Yes, I Am. November 30, 2020
    • All Signs Point To A Bottom- And Don’t Just Take My Word For It November 27, 2020
    • Virtual Real Estate vs Brick and Mortar Real Estate Investment- “Unlimited Upside”? November 27, 2020
    • An Inclusive New York City Real Estate Market- A Dream Home For Everyone November 27, 2020
    • Should I Stay or Should I Go? (A NYC Real Estate Market Conversation) November 27, 2020
    • Our Inventory Report: Actual Inventory Levels vs Sales Pace October 29, 2020

    Archives

    Call us: (646) 400-0769
    Email us: sharris@bhsusa.com
    Visit us: Brown Harris Stevens
    1926 Broadway
    New York NY 10023

    © 2021 The Harris Residential Team. All rights reserved.
    • About Scott Harris
    • About the Team
    • Press
    • Buyers
    • Sellers
    • Videos
    • Listings
    • Blog
    • Contact
    • Call Scott Now
    • Brown Harris Stevens Fair Housing Policy
    • ABOUT
      • ABOUT SCOTT
      • ABOUT THE TEAM
      • PRESS
    • BUYERS
    • SELLERS
    • VIDEOS
    • LISTINGS
    • JOIN OUR TEAM
    • BLOG
    • CONTACT
    • CALL SCOTT NOW
    New York City Real Estate | NYC, NY