Queens NY Mortgage Refinance: A Step-By-Step Guide
A Queens NY mortgage refinance can be the right option for you if you know how to do it correctly. Take a look at our step-by-step guide.
With a population of just over 2 million people, Queens is the second-most populous county in New York state, and one of the most sought-after real estate markets thanks to its competitive pricing, great location, and diverse housing options.
Compared to other boroughs, it offers more affordable housing, with a median home price of over $700k according to Zillow – which is still lower than Manhattan’s median of over $1.1 million, and Brooklyn’s median of $844k.
In addition, the increase in inventory of 9.4% year-over-year only adds to the attractiveness of the market for many homebuyers.
However, the slight dip in 2024 rates has increased the interest for mortgage refinancing, providing an excellent opportunity for homeowners to secure better rates, reduce loan terms, or access cash-out refinancing.
If you are one of those homeowners looking to benefit from a Queens NY mortgage refinance, we’ve got you – simply continue reading our step-by-step guide.
Step 1: Determine If a Queens NY Mortgage Refinance Makes Sense For You
The first and most important step of your refinancing journey is to determine if a Queens NY mortgage refinance makes sense for you in your current situation. Sometimes, you may want to take this step, but it doesn’t make financial sense yet.
So, when should you seek a Queens NY mortgage refinance? It might be a good idea to do that if:
Your Current Interest Rates Are High
One of the benefits of mortgage refinancing is that it allows you to score lower interest rates, which can only make sense if they are currently higher than the market’s averages.
For example, if your current rates are higher than the market’s average, mortgage refinancing makes perfect sense. Especially if you plan to stay in your home long enough to recoup closing costs through lower monthly payments.
You Have Built a Good Home Equity
Another sign that you are in a good position for a Queens NY mortgage refinance is if you have built significant equity, usually at least 20% of your home’s value. This puts you in a stronger position to refinance as you will be perceived as more trustworthy for lenders.
In addition, higher equity can also allow you to qualify for better interest rates.
Your Credit Score Has Improved
Mortgage refinancing can also be an excellent move if you have improved your credit score since taking out your mortgage. Since credit score is one of the most important factors that lenders consider when it comes to home loans, it can play a big role in your interest rates.
Higher credit scores reflect lower risk for defaulting, which means that you may qualify for lower interest rates. In fact, even a slight reduction can lead to substantial savings, as mortgages are long-term loans where each fraction of a percent can add up over the years.
You Want to Lower Your Monthly Payments
When to refinance your mortgage is a key question for many homebuyers. Another factor to consider when it comes to a Queens NY mortgage refinance is your end goal – which can be achieving lower monthly payments or cashing out.
Refinancing is a great way to lower your payments by extending your loan term. It also allows you to tap into cash-out refinancing if you need funds for home improvements or other major expenses. Considering Queens’ appreciation rate of 8.2%, it makes this option viable as you may have already built considerable equity over the recent years.
You Want to Switch to a Fixed Rate
A Queens NY mortgage refinance can also make financial sense for you if you currently have an adjustable-rate mortgage (ARMs), but you want to switch to a fixed-rate one to protect yourself from the market’s volatility.
Doing this will give you more predictability and stability in your monthly payments, which will not only give you peace of mind but can also reduce costs if interest rates are expected to rise soon.
Once you’ve determined your goals with mortgage refinancing, as well as whether it makes sense for you in your current situation, the next step to secure a Queens NY mortgage refinance is to assess your financial health.
This step is essential because it will directly impact your new interest rates. While ultimately it’s the lender who will make a thorough evaluation of your financial health, we recommend that you also do it beforehand to get a better perspective of your current situation – this will help you manage your expectations accordingly.
To properly assess your health, ask yourself the following questions:
What is my current credit score? Has it improved since taking out my mortgage for the first time? – Keep in mind that a score of 700 puts you in a better position.
What is my current Debt-to-Income Ratio (DTI)? – Lenders will typically look for a DTI below 43%, but the lower it is, the better.
What is my current home equity? – In other words, what portion of your home do you currently own? A home equity of 20% or higher is ideal for better rates.
Can I prove a stable employment and income? – Make sure that you are able to prove a consistent income and a stable employment history.
Keep in mind that, if you’ve recently changed jobs or income sources, you may need to provide additional documentation to verify stability, especially if you are self-employed.
Once you’ve assessed your financial health, you are ready to move on to the next step of a Queens NY mortgage refinance.
Step 3: Choose The Right Lender
Of course, one of the most important steps when it comes to a Queens NY mortgage refinance is choosing the right lender. The good news is that you don’t have to refinance with the same lender as your current mortgage.
In Queens, where property values are high, even small differences in rates can make a big impact, so make sure to look for lenders that can thoroughly assess your situation, and provide a personalized offer based on your needs – such as Jet Direct Mortgage.
When looking for the right lender, pay close attention to factors such as interest rates, closing costs, and loan terms. Additionally, evaluate customer service and loan processing speed to ensure a smooth refinancing experience.
Choosing a lender who specializes in the Queens market, like Jet Direct Mortgage, can offer localized insights, potentially improving your refinancing options and rates.
Step 4: Submit Your Documentation
The next step in getting a Queens NY mortgage refinance is to submit your documentation. This includes, but is not limited to:
Proof of Income – Recent pay stubs, W-2s, etc.
Bank Statements – For the past 2-3 months
Credit Report – Ideal to check beforehand
Proof of Homeowners Insurance – Ensures adequate coverage
Property Details – Original mortgage statement, property tax documents, and HOA information
Personal Identification – Such as a driver’s license or an ID
Debts & Liabilities – Information on other outstanding loans
Keep in mind that the exact documentation that you may need to provide may vary by lender, so it’s always great to check with them before you apply.
Step 5: Close On Your New Loan
Congratulations! You are one step close to closing on your new loan, and reaping the advantages of mortgage refinancing. The last step of securing a Queens NY mortgage refinance is to sign the necessary paperwork.
Once the loan is finalized, your new mortgage will pay off the previous loan, and any changes in monthly payment or loan terms will take effect.
Keep in mind that the application process may vary depending on the lender – that’s why it’s important to choose a financial institution with a fast and streamlined online process such as Jet Direct Mortgage.
Can I refinance my mortgage in Queens, NY with a different lender than my current lender?
Yes, you can get a Queens NY mortgage refinance with a different lender than your current one. Many homeowners refinance with a new lender to secure better rates, terms, or customer service options.
When refinancing, your new lender will pay off the balance of your original mortgage, making them the new loan holder. This allows you to benefit from improved terms that align with your financial goals.
Are there downsides to refinancing my mortgage?
Refinancing your mortgage has potential downsides. You’ll incur closing costs, which can offset savings if you don’t stay in the home long-term.
Additionally, refinancing resets the loan term, potentially extending the time to full repayment and increasing total interest. If you’re refinancing to access cash, your equity reduces, affecting long-term financial stability and possibly raising monthly payments.
When is it not worth refinancing?
Getting a Queens NY mortgage refinance may not be worth it if the closing costs outweigh potential savings, particularly if you plan to sell soon. It’s also unwise if refinancing extends your loan term significantly, increasing overall interest paid.
If your credit score or equity is low, you might face higher rates or need private mortgage insurance, negating benefits. Lastly, if current rates aren’t much lower than your existing rate, refinancing may offer minimal savings.
Experienced Chief Operating Officer with a 26 + year demonstrated history of working in the banking industry. Skilled in all aspects of the residential mortgage market . Strong business development professional with a Bachelor of Science (BS) focused in Business Administration and Management, from St. Joseph College. A direct endorsement underwriter and a licensed Mortgage Loan Originator.
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