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What fees will I have to pay when refinancing my NYC co-op mortgage?

Refinance fees are relatively low for co-op shareholders. 

Austin Havens-Bowen for Brick Underground/Flickr

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Question:

What is the typical mortgage refinance fee for a New York City co-op? And I've heard they are going up—what's the deal here?

Answer:

Refinance costs should be relatively low for New York City co-op shareholders, our experts say. Rates are now at historic lows, particularly for 15- and 30-year fixed-rate mortgages, so it's a good time to lock in a more favorable rate on your co-op. 

Keep in mind that refinancing essentially means applying for a new loan, so you'll have to prepare all the necessary documentation of your finances. You should also expect to pay some closing costs.

"Closing costs for the refinancing of a NYC co-op are generally less than $4,000," says Melissa Cohn, executive mortgage banker with William Raveis. "They are comprised of five basic fees, and there is no expectation that they will increase in the near future." 

These fees are charged for your loan application, apartment appraisal, co-op questionnaire, bank attorney, and lien search and filing, Cohn says. 

Fannie Mae and Freddie Mac have announced that they will add a .5 percent charge to refinance loans starting December 1st, but this will not have a major impact on borrowers. 

"The increase will impact the rate that lenders can offer for refinances," says Mary Alex Blanton, vice president of National Cooperative Bank (a Brick sponsor). "It's not a fee, technically, just a loan level price adjustment."

And in fact, this adjustment has already been incorporated into interest rates, so there's no need to rush to refinance before it officially goes into effect. 

"All lenders have built this new cost into rates effective October 1st, as the average cycle of a loan is 60 days or more," Cohn says. "This additional fee has caused mortgage rates to increase by about .125 percent on average."


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