Refinancing or Purchasing in Turbulent Markets
To Lock or Not; that is the Question.

"Home Loans and the Internet" Builder & Remodelor - November 2002

This has become a very powerful question over the past ten to twelve weeks. Volatility in the market place has led to windows of opportunity that may have only lasted for 24 to 48 hours at a time. According to the Fed Chairman Alan Greenspan and his fellow bankers we are in a reversionary stage. On any given day this view point may be shaken by rising stock prices and news which may indicate some signs or early recovery. However, people remain concerned about when or if to make a move. Enter the Mortgage Counselor.

A good Mortgage Counselor will give accurate timely information. For example, recently, while getting ready for the day, I was watching some pre-market activity which strongly indicated some breathing room for the bond market. This means having the opportunity to lock in mortgage loans at favorable interest rates. On the way into the office, I contacted my loan officers to inform them of this opportunity and to make sure they in turn reached out to any client who could benefit from this market move. Upon arrival, I immediately informed my clientele of these favorable conditions and recommended they take advantage today. As a result, we were able to lock in a large block of mortgages. Immediate action based on trustworthy information gave our clientele an advantage they might not have otherwise had.

Providing options is also of the utmost importance. That same morning I phoned a customer who was purchasing a newly constructed home and was concerned as to the rational of locking in a rate now or waiting nine to twelve months when his home was closer to completion. I gave him choices: either he could wait and be subject to market volatility during the remainder of his construction or to lock in a rate immediately which would give him the option of enjoying a lower rate if the market was in fact lower at the time of his closing. By locking in timely the client would have the benefit of a guaranteed rate and allow him to feel secure in the fact that his interest rate would not go up for the next thirty years.

Similarly, comparative information allows a client to see reality. Recently a customer could not decide whether to lock in a rate immediately or to wait in the hopes the interest rates would go down. I was able to show the client what the payment would be per month at the current rate verses where he believed the market was going. He discovered the difference in payment was minimal and realized that he could avoid any further risk of rates going higher by locking in that day.

For the past 18 years, through the management of pension funds for blue chip companies and mortgage funds relating to new construction, I have developed the ability to accurately and consistently analyze markets, by using a conservative approach, sensitive to the preservation of capital and financial well being. In short, I teach people to trust my judgment by consistently providing accurate, timely information in straightforward terms. Choices are clearly explored so that people are aware of all of their options in financial decision making. I am confident in my ability to provide helpful information and feel a sense of pride in being able to have others benefit from my experience.

In the coming months I will be discussing useful information relating to mortgage financing. We will be exploring various options available to new construction clientele, as well as builder financing and home improvement lending. Also, you are invited to make suggestions as to topics you would like me to address.

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