People I talk with every day spend their time trying to figure out the mortgage market, not that there is anything wrong with that. I spend a great deal of time trying to figure it out myself, but I don't come from a fixed position while most of the aforementioned people almost all come from one of two positions. And depending on which one they come from they all generally make the same assumption. Those who have a low arm (adjustable rate mortgage), high 3% to low 5% with a year to several years to go before their fixed portion turns into a variable almost unanimously believe the mortgage market is heading up. Not only is it going to go up but it will happen before their fixed portion is up.

Those people who aren't burdened with that scenario but need to refinance for one of a myriad of reasons all, for the most part, currently believe the mortgage market will go lower and therefore they have to wait to refinance. One thing I know for sure is they both can't be right but they both can be wrong. Those who have the low rates in the arms who opt to go to a higher rate now for safety (the mortgage market is in the low 6% range) could find a much lower market in the coming years. Those who need to refinance now and don't, could find a moderately higher mortgage market in the coming months and would then probably act to refinance then in frustration that they missed the lower rates.

It is hard enough to try to follow and project the path of the mortgage market in this Country because of the many factors that influence those who are most responsible for the interest rates. When you have a bias it so influences you that predicting becomes projecting (your fears) and the net result is a loss instead of a gain.

I advise everyone with an arm that has time to go before the fixed period is up, to hang on until they can make a switch to a longer term with the same rate or until the variable is upon them and the rate of the variable is too high. The one caveat is that they don't need to refinance to get some needed cash now. Just recently I had the fixed portion of my arm expire and found that the variable would be lower for a year than any other rate I could get at that time. People always assume that the variable is going to be sky high without ever reading their loan documents. In my case the maximum the variable could go on the first change date was 2% and that still kept me under the market.

A few dozen columns ago, or maybe a bit more, I wrote about the fact that one shouldn't gamble with their financial instruments. Making an assumption based on an inherent fear is gambling especially when you fail to read and understand what protections you are afforded by the terms of the instrument. If it turns out to be "Greek to you" seek help from a trusted professional in the field. If doing something like that makes you nervous remember you are acting to prevent a loss. That loss would be yours!

Life works better when you understand from the start what you are doing and do not have to worry during the term of the financial commitment that something awful might happen.

When you decide to take action make sure you can "sleep with the result"! I advised my attorney to take a 15 year fixed loan when he came to me to refinance last year. I suggested he roll all of his debts into the mortgage and pay everything off in 15 years. His monthly savings would be about $1500 and he would actually be paying down everything he had owed in a manner he had never experienced. He did what I told him and three months later he called and begged me to put him into a 30 year fixed. Although he was saving better than $1500 a month the size of the one payment, his mortgage payment, frightened him, and after weeks of anxiety he went back to something that ended the pain. Who knew?

I am not a swami or guru but merely someone who deals with a fairly large amount of people on a daily basis and have seen and heard almost everything that one could imagine. Therefore I feel pretty comfortable in writing this column and telling you not to assume anything. Study, ask questions and be fairly confident you have looked at both sides of the equation before you act. Do not let irrational fears guide you and never, never ever get yourself into something that goes against your nature, your personality or your beliefs. The pain isn't worth the gain.