Hey all, I'm looking to refinance my property in Brooklyn - it's been 10 years since I bought it so my interest rate is astronomical compared to today's options. I have renters in there now and when I bought it I lived there so I'm sure I won't get as great a rate as if I still lived there but I think it'll prob still be better than what I have (4.875.

I have a few questions for the group - this is my first time refinancing...

- Is it better to go through a mortgage broker or to call around/use bankrate.com to individually reach out to lenders

- When bankrate lists "zero upfront fees" what does that mean? Are there still other closing costs to estimate with a refi? How do I calculate those extra costs?

- Anything else I should know or look out for in this process?

Thanks all!

@Ayana Morali  Definitely use a mortgage broker, you'll get the best rate & term possible.  I have a great one in NYC if you need the info.  My firm can provide a title quote for you for the closing costs on the loan(not including bank fees).

As for the "zero upfront fees" I'm not sure, but no one should charge any "upfront fees".  If there are fees, they're only to be paid at the closing table.  Good luck!

Hi Ayana, below are the answers to your question:

- Is it better to go through a mortgage broker or to call around/use bankrate.com to individually reach out to lenders?

I'm biased to this because I'm a lender myself so I will say better to contact a loan officer because the service you will get will most likely be a lot better and more importantly faster (rates are going up like crazy specially in the past few days).  Big banks and online lenders will probably offer a slight discount on your rate though

- When bankrate lists "zero upfront fees" what does that mean? Are there still other closing costs to estimate with a refi? How do I calculate those extra costs?

The only up front fees are condo questionnaire fees and appraisal fees - I will guess your condo won't need an appraisal if you are doing rate/term refinance  given your loan amount to the value of the property.  Both the appraisal and questionnare shouldn't be over $800 

- Anything else I should know or look out for in this process?

Are you a co-op or a condo? co-ops will be tougher to refinance and maybe even a little more expensive 

Originally posted by @Ayana Morali :

Hey all, I'm looking to refinance my property in Brooklyn - it's been 10 years since I bought it so my interest rate is astronomical compared to today's options. I have renters in there now and when I bought it I lived there so I'm sure I won't get as great a rate as if I still lived there but I think it'll prob still be better than what I have (4.875.

I have a few questions for the group - this is my first time refinancing...

- Is it better to go through a mortgage broker or to call around/use bankrate.com to individually reach out to lenders

- When bankrate lists "zero upfront fees" what does that mean? Are there still other closing costs to estimate with a refi? How do I calculate those extra costs?

- Anything else I should know or look out for in this process?

Thanks all!

 first off, 4.75 isn't too high lol but you could probably get in the threes or even high 2's if youre lucky. Im a big fan of calling 10 lenders and asking what their rate is and what their costs are, you can find the best rate this way. And its a great way to start a relationship with a lender, im a big fan of local credit unions here in Columbus, there is probably millions out near you in brooklyn!

I just got a 2.85 cash out refi on a duplex owner occupied. Low 3s if not owner occupied. $500 closing costs. A mortgage broker is a good place to start but I'd recommend calling some local banks a lot will have special promotions or just good rates. 

If it's not owner occupied, expect the rate to be roughly 1% higher. as you alluded Ayana, you may only decrease it by less than 1%. i have a HELOC on an investment property (not owner occupied with tenants) and it was around 4.6%.

typical rule of thumb, if you can reduce at least 1% then it's worth looking into further of doing a refinance. with what i know so far, and if you plan to keep the tenant, it may not be worth it. if you are moving back into the property, it may be worth it. 

Zero upfront fees can mean that you add the closing costs into the new loan amount, for example, if you needed $200,000 to pay off the balance of your old loan but there was $4,000 in closing costs, you might be able to do a new loan of $204,000.  

Some closing costs are pretty much the same no matter what lender you use, like the appraisal fee.  Often the appraisal fee is needed upfront because it needs to be ordered early on in the process so it can go to the underwriter when it’s completed.  It’s the bank fees (that go to the lender itself) that can vary a bit.  

Lenders do charge more to the rate/points when a property is not owner occupied, or when it’s a multi unit, as you might recall from when you purchased.  

If you’d like a few names of experienced mortgage loan officers in NY who know the New York market (there are a lot of quirks here), feel free to message me.  

You should easily be closer to 4% than 5%. Use a broker or spend a day dialing around! 

I believe going with a mortgage broker is better most of the time, but don't let that stop you from exploring direct lenders and banks as well because sometimes they can offer you a superior rate and product. I agree with those that said you should shop and compare multiple lenders/brokers/banks before deciding which one to use. I would also encourage you to approach your bank or credit union where you already do banking because sometimes they offer discounts and products that are superior because of your banking relationship. 

@Lawrence Dy makes a great point - why not ask at whichever banks you already do business with to see if you can get any discounts.  JPMorgan Chase & M & T Bank have been known to do this for their customers.  Sometimes there are discounts for being a union member (or having a spouse who is), or belonging to certain organizations (American Medical Assoc., AAA, AARP, etc), but you won't just hear about them, you have to ask.