9) Deadline-Tightrope Missteps

Virtually every loan requires that you notify the lender of your intention to refinance. This notice must be delivered in a certain way at least 30 — and sometimes as much as 90 — days in advance of the new loan closing. This gets tricky when the existing lender requires irrevocable 90-day notice and the new lender requires commitment acceptance within 30 or 60 days. It gets even worse if you forgets to notify your existing lender and lose a commitment for failure to close on time.

10-12) Cluttering the Closing

Three more potential problems are hidden title defects, lost loan documents and unresolved legal and/or environmental situations. The closing is not the venue for uncovering and resolving such issues. Waiting until you have a commitment may even be too late. The best time is before you start talking to lenders.

Every one of these Deadly Dozen problems can be prevented by planning and by getting your co-op's professional advisers involved early on. Refinancing your underlying mortgage is the most important decision a board can make: Your choices affect not only every shareholder's monthly maintenance but also their apartments' market value. Avoiding the Deadly Dozen will go a long way toward successful refinancing.

Patrick B. Niland, a mortgage broker, is the principal of First Funding of New York.

Adapted from Habitat February 2009. For the complete article and more, join our Archive >>