When Sitting On The Fence: You May Get Off, Fall Off Or The Fence May Break

Mortgage and Lending with Greenville, NC


Most of you are aware that we are in the midst of a refinance boom. The basic mortgage interest rate has been below 5% for about a month now. Interest rates will vary for each client depending on a variety of factors.


This week, the week of January 12-19, 2009, I characterize as the week of the fence sitter. I know this must be true, not only in Eastern North Carolina, but elsewhere. I’ve read a couple of posts this week along the same subject line.


Jason Sardi, from Allentown, PA was one that I read and another was written by Jeff Belonger of Cherry Hill, NJ. This makes me believe this phenomenon stretches across many markets.


What’s up with the fence sitter? This is someone that just can’t make the decision to pull the trigger and initiate their refinance. They think rates may be going lower. Someone told them so, or rates ticked up for the last day or two and surely they will go back down. They need to talk to upteen lenders to find the, to the penny, best deal. If you are evaluating a refinance, you are working with someone you trust, and the refinance is of benefit to you---MAKE THE DECISION! Note: If the refinance is not of benefit to you and you are working with a trusted advisor they will advise you not to go forward.


What are the consequences of sitting on the fence?


You can get off the fence! Make the decision and don’t look back. It is impossible to purposefully pick the moment in time that has the lowest ever rate. Rates have been very volatile, changing often four and five times a day. Make the decision---get off the fence!!


You can fall off the fence! For this particular week Wednesday, around midday, was the lowest rate point for the week. Nothing but upward movement for the remainder of the week. Will rates go back to where they were Wednesday morning? I honestly don’t know, maybe or maybe not. I was working with two separate clients Wednesday morning, neither made a commitment.


Both were sitting on the fence and they fell off. If we don’t see rates go back to where we were discussing they missed their chance. If they do go back down to that point, well that will be great, but we just delayed completing their refinance and the benefits accruing to them.


The fence can break!  In my opinion, this recent downward move in interest rates, down to 40 year lows, has been driven by the Federal Reserve and Treasury Department buying mortgage backed securities. This has artificially driven rates down. When the government quits playing the game rates will go back up. They will probably go back to what has been the natural equilibrium of the past six to seven years, if not higher. Game over the fence will be broken.  Note: look for an upcoming post on my opinion as why the Fed and Treasury have been doing this.



Are you sitting on the fence? It is time to get off! You don’t want to fall. Once the fence breaks the game is over.


Please share your comments and opinions of our current environment. Dissenting opinions are welcome.


Jay Williams




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Comments (4)

Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Jay... all very good points. Another thing that hurts and makes these fense sitters is that 4.875% sounds a lot better than 5.0%, when in reality, it's only an 1/8 of a percent. It really only changes the payment about $7 a month, depending on the loan amount. As you mentioned, if it makes sense, do it... a trusted loan officer will tell you otherwise.  PS>.. thanks for the polite mention.

jeff belonger


Jan 17, 2009 02:25 PM
Jay Williams
Greenville, NC - Greenville, NC
Mortgage Loan Officer - Getting You The Right Loan

Jeff, exactly, I was thinking about just that today. $7.00 a month or 23 cents per day. There is a lot of time spent for 23 cents per day


Jan 17, 2009 02:42 PM
Lou Williams

Great Advice Jay! I will go see you on my next home loan.

Jan 18, 2009 05:32 PM
Jay Williams
Greenville, NC - Greenville, NC
Mortgage Loan Officer - Getting You The Right Loan

Lou, and I can tell you will not be "sitting on the fence"


Jan 18, 2009 11:10 PM