Refinancing in today’s market for the Dallas, Frisco, and surrounding cities can be a time for a mortgage consultants where the consultant may have to decide in deciding what the near future may bring in market changes whether to advise a prospective borrower to lock and realize what the market has brought, or to float (hold of on the lock for the time being) in hopes for the even better rate. My concern is, are there too many people striving for the ever “impossible deal”. Working in a refinance boom brings out the shifty character that is embedded in man…in general. This thought brings me back to a trophy fish that has not, and will not ever be caught by “The Sons of the Sacred Shrimp”.
As a kid, my father and some of his fishing buddies organized a small amateur fishing “club” that was only made up of about 5-6 people w/in their tight nit buddy group. Their club names were derived by using a coastal fishing name that started with the same letter as their last name…Lighthouse Lynch was my families club name, and there were names like, Gaftop Godfrey, Redfish Robinson. The motivation that was set in the goals of the club was a single fish by the the name of Freddy Fish. Freddy Fish was the ever elusive largest fish one could catch of any such fish species. You can’t catch it, I did. ha ha
It might be the one that got away” that all fishermen have come across. This thought is one that comes to mind in the mortgage world. I have witnessed clients chase the one interest rate that can never be “caught”, and I’m going to call it, Iden (pronounced with a long i) interest rate. Iden is an Anglo name meaning wealthy.
It seems like the lower a rate lock I secure for a client, the more I’m pushed to find the next lower. I don’t see this as hope as much as I see it as greed. Iden the Interest rate will not be “caught” by the masses. There is only one owner of the record size bass caught in the world, yet every angler fishes in hopes to catch that next record. Obviously, the angler has nothing to lose by fishing for Freddy Fish, but let me advise to you prospective borrowers and buyers, YOU DO HAVE SOMETHING TO LOSE BY CHASING IDEN THE INTEREST RATE. Only a very small few will stumble upon Iden, and the rest will ultimately settle for a lesser rate after you’ve passed on Iden’s not so bad cousin (a better one) hoping to catch Iden.
In the last week, I had 4-5 past clients that became prospective borrowers in the refinance market. They all mentioned to me that “if I could just get 5% flat or ANYTHING UNDER 5%, I would jump on it”. Well, “the tide receded” lower than ever expected in recent years and I had the opportunity to lock them all at .25% or better than they thought possible. I was very excited to deliver the message to all of them about exceeding their expectations, and not a one of them responded with excitement as their innate drive for Iden the Interest rate set in.
I read Christian literature, and this morning I came across some reading that was written by a Christian Author, but is probably written in numerous publications in all genres of readings that made good since. The basic thought that I pulled from this is that every leading world power that has ever been throned in the history of mankind has been dethroned, whether it be the unimaginable dynasties in China, or the crushing power of Caesar and the Romans, or the vast reaching power that had such an abrupt ending of Hitler’s Germany. You may ask what this has to do with this Blog? America the beautiful has been the so called world power for some time now, and if history defines the future as it has for years, we Americans may need to realize that we aren’t necessarily “world beaters” by default. We bleed the same color as the guy living in the Siberian Mountains that still survives from hunting and gathering. Our countries foundation is breakable only when the economy to support it is broken. In a 2009 economic forecast by an industry leading economist I listened to yesterday, he mentioned of Japans struggle through my lifetime to pull from a depression and/or recession, just as they appeared to break free, they fell back into it. America could very well be on a drawn out fall with the rest of the worlds economy that may lead to unforeseen and expected economic times that no man can forecast…I’m not speaking Biblically here.
Economists do not have crystal balls, and the mortgage forecasts are gambles. I use the name economist and optomist synonamously, because it seems like economist never fail to deliver a positive hope accompanied by their report of our failing economy.
In the concluding statement here, I’ll let you draw your own conclusion for an answer to the question, “Brad, I know rates are unbelievably low right now. But, we didn’t think they would get this low. DO YOU THINK WE SHOULD REALLY LOCK MY LOAN RIGHT NOW?”