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NEW YORK may be world's most exciting place, particularly New York City. But its realty prices too are at the top of the world. It's not easy to find low-rate mortgage or mortgage refinance in New York. There are many catches in the refinance proposition, which can leave you with a raw deal if you haven't done your homework properly and followed it up with professional advice.

Issues involved

 Many uninitiated people think that the interest rate alone is a useful tool to compare different mortgage refinance options. However, interest rate can be misleading because it does not cover other upfront fees and costs that the borrower has to pay. A better indicator is ‘APR’ (annual percentage rate) which covers the gross money inclusive of upfront fees and other costs the borrower will have to pay in the course of a year. You should also know that a low monthly payment is not necessarily indicative of a low interest rate for it could entail a longer duration of the refinance loan.


You are the decision-maker

 To get going in your search for a mortgage refinance loan, you should first of all decide what it is that you are looking for? Are you looking for low monthly installments only? Are you looking for closing your loan at an earlier date than scheduled in your existing mortgage loan, i.e., the loan you want to pay off with the refinance? Or are you looking at increasing the loan repayment period because you want to reduce your monthly outgoings? Do you expect your income to increase in the near future? Or in the distant future? Or do you expect your income to fall? Do you plan to retain your property for a long time? Or do you want to sell it away soon? How are property prices in your locality likely to move in the short-to-medium-term?


The above is a sampling of the questions you must ask yourself before starting a mortgage refinance hunt. And, obviously, nobody but you can answer them correctly. Be honest to yourself. If you are in a job in a shaky company, don't lull yourself into believing that you will have the job as long as you want or that you will get a hefty pay hike next month. Fortunes of companies change and large-scale retrenchments are not uncommon any more.


Understanding ARMs

 Fixed rate loans are easy to understand, but adjustable rate loans need a little elaboration. Usually referred to as ARMs, adjustable mortgage loans come on a fixed rate for a certain number of initial years and then the rates are adjusted every subsequent year. To illustrate, "15-year-3/1 ARM" means the loan period is 15 years, and that a fixed (usually low) rate will apply in the first three years, and then the rate will change (usually rise) every year thereafter. Adjustable rates are good if you expect your income to rise in the course of time, of if you want to sell off your house in the next few years, or if you have a seasonal income. There are also other types of loans, such as jumbo loans, interest-only mortgage refinance loans (i.e., you only pay interest every month under an agreement that the principal will be recovered at the end of the loan term through your life insurance, pension or liquidation of an investment), but the most popular are the ARMs followed by fixed interest loans.


Understanding interest-only loans

 This is an interesting type of loan in which you only pay the interest due every month. The principal will be recovered by the lender at the end of the loan term by way of your life insurance, pension, or investments such as stocks and bonds.


Getting quotes


To make a good choice, you must visit the websites of at least three lenders and/or brokers and use their online calculators. Two websites we recommend are:,,, and . There are many other websites that provide equally good online calculators. Once you have got a number of quotes based on different parameters specified by you, you are equipped with what to expect. Do remember however that online quotes are only approximate and the final quotes will vary by small margins.


Once you make your pick/s from the online quotes, contact at least three different lenders or brokers registered in New York, and get quotes from them. You can ask for lenders/brokers even through their websites. Compare their quotes and choose the one that's best for you. You must compare them all with each other, and then weigh each option against your own need. We started this article on the note that it's not easy find low-rate mortgage refinance in New York. We end it saying it's indeed easy if you follow the contents of this article.