When to Refinance Your Mortgage

To refinance or to not refinance, that should be the question! just because interest rates go down does not mean you should refinance!

As a rule of thumb, rates should be at least 1% lower than what you are paying before refinancing could make sense for you from an economic perspective. 

I say “could” because if you are at the point on your mortgage where your interest payment starts to equal your principal reduction, it may not be in your best interest to refinance, regardless of the rate! 

Then there is the matter of the closing costs. As another rule of thumb, closing costs could cost you about 1.5% of the loan amount. What about the “no points” loans? they still cost you the same, the only difference is you don’t see these costs because they are built into the rate. In other words, your rate is higher when you opt for a “no points” loan.

Gauging your mortgage refinance options solely by your monthly payment is like looking at only one side of the coin.

There may be other reasons for refinancing:

• maybe you have a legal situation that requires you to do so.

• maybe you need to get cash out to invest in your business or pay debts.

• maybe you are getting a divorce and your espouse wants out of the loan.

• maybe you want to get out of a loan that is choking you.

• or you have an adjustable loan and would like to turn it into a fixed loan.

Whatever the reason may be, once you decide that you want to move forward, we can offer these options:

1. Regular, Standard loan based on Tax Returns to document your income.

2. Alternative documentation loan where you could use: your bank statements, profit & loss from a business, assets (called asset depletion) or your bank balance.

3. If you have substantial equity, at least 30% or a substantial down payment and a mid FICO score of at least 700, we can offer a loan where you do not need to document your income.

We are a boutique mortgage brokerage, we are looking to build long lasting relationships with our clients, and we will craft a mortgage for your specific circumstances. 

For more information, please call 310-294-9417 and speak with Alejandro.

“Alejandro came highly recommended by a friend, and he did not disappoint. I recommend Alejandro to anyone who needs an honest, dependable mortgage broker.”

— Nolan, Client