Now? Yes. Why? Because I said so.

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blog-author-jeffreypinkerton5

As you probably know, a good portion of my business comes from friends and family and referrals from friends and family.  I realize that some people think that “you just don’t mix business and family” to which I wonder, mainly, how messed up is your family that you can’t trust them to take great care of you in business (shouldn’t they take BETTER care of you, because you are family)??? 

Anyways, my brother and I had been talking about their mortgage over the course of last year and during the holidays, the topic came up again.  We all agreed that it was something that they “needed” to look in to.  My sister-in-law and I got together over the phone a week or so later and crunched some numbers, went through the specifics, and talked about rates, the refinance process, current trends, and the best-guess future of mortgage rates.  After our conversation (the “looking in to” part), we decided that refinancing the mortgage was the right thing to do.  But when?

This scenario is not uncommon.  First, people realize that the need to look in to refinancing.  Second, people realize that they really should do something (to save money, consolidate a 1st and 2nd mortgage, to protect themselves from the future adjustement of an ARM).  But the next step is generally where people get stuck.  They know they should do something, but they aren’t sure when they should do that certain something.  Will mortgage rates go even lower?  Should I wait a little longer and ride out my adjustable rate mortgage?  Should I make a few more phone calls and get a few more estimates?  Should I wait to talk to my dad this weekend and see what his advice is?  Or see if my aunt’s boyfriend who use to be in the mortgage business has any ideas?  Or wait until the guy on the radio mentions that it is a good idea . . . the reasons for waiting are endless (and often times fruitless as well).

With family, here is the great thing — since we had already decided it was a wise decision to refinance, and because we had already gone through the details (costs, savings, etc), a week or two later, when mortgage rates dipped to their lowest point in history, I called him — not to “review his current refinance options” (although we could have certainly done that), and not to “remind him how a refinance and a historically low interest rate would prevent his LIBOR based ARM from increasing his payment in the years to come” (although we could have revisited the historical trend of the LIBOR index and talked about payments at an adjusted rate of 6.75% or 7.5%) — I called him to TELL him it was time to lock-in his rate.  “Hey, you need to lock-in your rate, TODAY.  We can get paperwork over the next few days, but today is the day to lock-in.  If rates go lower, it won’t be by much.  You need to lock-in.”

He took my advice.  And he has an amazingly low rate on his mortgage (fixed forever) to prove it.

Today (October 1st, 2009), I would love to be able to pick up the phone and say the same thing to you.  But since we aren’t family, this blog post will have to suffice.  If it makes sense for you to refinance and if you are able to refinance, it’s time to lock-in and move forward.  You need to lock-in.  Why? 

The long answer:  the lowest rates in history; mortgage rates have inched down over the past 7-10 days; Feds are easing purchase of mbs which should make rates slowly go back towards 6.0% between now and March 2010; employment figures are coming out tomorrow and the market seems to have a way of spinning bad news in to good news which is bad for motgage rates; you’d be crazy to wait in hopes of inching out another 0.125% in rate at best because the market has proven that we are at or close to the bottom, with the potential for things to go up 0.5% or more without warning).

The short answer:  because I said so.  : )

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