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Is now a good time to refinance my mortgage? How long will it take?

Refinancing a co-op could mean jumping through a few hoops with your board. 

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Question:

How long does it take to refinance a mortgage in NYC? Is now a good time to do it? What are the factors that could speed up or slow down the process?

Answer:

Now is a good time to refinance, our experts say, and the amount of time the process will take depends on several factors, some—but not allof which are in your control. 

"If you are planning to stay in your home, now may be a great time to tap into your home's equity and look to refinance your current mortgage," says Mary Alex Blanton, vice president of National Cooperative Bank (a Brick sponsor).

Mortgage interest rates rose in early 2018, only to drop recently, so there's no time like the present to refinance and lock in a lower rate. Expect the refinancing process take from 30 to 60 days, though the timeline will depend on your bank, your co-op board, and your own preparedness. 

"The length of time it takes to refinance is dependent on the bank’s process and the form of ownership," says Deanna Kory, a broker with Corcoran. "Banks usually take up to four weeks to issue a commitment letter on NYC real estate. After that, it is a matter of additional processes the bank has to go through depending on whether the property is a co-op, condo, or house." 

For owners of condos and townhouses, the process is more straightforward, she adds, but co-op residents face the additional hurdle of getting board approval. Expect the board to ask you to share financial information, including your tax returns, in order to demonstrate that you'll be able to keep up with payments on your new loan. 

"The board can turn down the borrower if they feel that [they] cannot handle the payments and maintenance," Kory says. "The board approval can add another one to six weeks to the process, depending on whether or not the co-op or managing agent is stringent or relaxed." 

The appraisal process, too, can cause potential delays, particularly if you don't agree with your appraiser's assessment, but there are some aspects of refinancing over which you have control. Checking your credit ahead of time, and having all your paperwork in order, for instance, will help speed things along with both your board and the bank. 

"To insure you help move the process along as quickly as possible, make sure you are supplying all the information that the bank is requesting as quickly as possible," Blanton advises. 


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