Fixed vs Adjustable Rates

Apples vs. oranges. Boxers vs. briefs. Dave Letterman vs. Jay Leno. These debates may rage on for decades, and we can add another one to the list: fixed vs. adjustable. We’re speaking, of course, of fixed rate and adjustable rate mortgages.

Let’s start the discussion by talking about risk. If I had to pick one word that explained the mortgage industry, it would be risk. If you can understand the concept of risk and how it relates to mortgages, you’re way ahead of the game. In a nutshell, riskier loans mean higher interest rates; you compensate the person lending you money by paying them a higher interest rate. If you have low FICO scores, this is a higher risk to the investor since you don’t have a good history of paying your bills on time, so you’re going to have to pay a higher rate. If you can’t verify enough income to qualify for the loan, this is a higher risk and you’re going to have to pay a higher interest rate.

As it relates to this discussion, the longer you ask the lender to guarantee your interest rate, the higher risk for them since they’re guaranteeing the rate you get but they don’t know how much their funds are going to cost them going forward. This isn’t an easy concept to wrap your mind around, so don’t feel bad if you don’t get it yet. Lenders work on a concept called arbitrage, which is a fancy way of saying they borrow money at a certain rate and then lend it out to you. However, lenders don’t get money at 30-year fixed rates, so when they borrow money they have to try to gauge what it’s going to cost them over the time they lend it to you. If you’re following me so far, you can understand why they would charge a higher rate to guarantee you a certain rate for 30 years as opposed to 3 or 5 years. Now, on to our discussion…

On the one hand, we have fixed rate advocates. These days, this is a relatively easy argument to make since rates are at 40-year lows. The main reason to get a fixed-rate mortgage, whether it be a 15-, 20-, or 30-year fixed, is to protect yourself from adjustable interest rates. When you get a fixed rate loan, you know exactly what your payments are going to be and they’re not going to change for the life of the loan. In a time when rates are rising, a fixed rate mortgage gives you the security of knowing that you’re safe.

On the other hand, there are the adjustable rate advocates. The main argument here, in a nutshell, is that you shouldn’t pay for something you don’t need. A great majority of people out there will only keep their mortgage for 3-5 years. Maybe it’s a job change, maybe it’s an expanding or contracting family, a refinance for home improvements or college for the kids, or any number of life circumstances. Since you’re probably not going to keep your mortgage for 15 or 30 years, you’re probably better off to get a lower adjustable rate mortgage and pocket the difference.

I’m not going to say one argument is better than the other. There’s no such thing as a “good” or “bad” loan, but there are loans that are better or worse for certain people. In my career as a mortgage consultant, I can tell you that I’ve done very few fixed rate loans. I only recommend them in two cases – when people are on a fixed income and need to know exactly what to expect from their mortgage, or when people are absolutely sure that they’re not going to move or need to refinance for many, many years. In a great majority of cases, people don’t need a fixed rate loan and would in fact be much better off with a loan that accomplishes their goals and saves them money in the long term. Like oranges vs. apples or Letterman vs. Leno, fixed vs. adjustable is not a debate that can be definitively settled, but I hope I’ve helped you figure out which one may be right for you.

To Rate Doctors Can Be a Huge Help

Rating professionals is not a new concept for web sites. Most college students are familiar with rate your professor web sites that let them rate and review their professors. And thanks to consumer driven web sites, consumers are already familiar with rating their contractors, dry cleaners and other professionals hired for a job. But, now there are web sites that allow consumers to rate doctors.

Rating doctors however is not quite the same as rating other professionals, as many doctors who oppose the web site concept have pointed out. For one thing, if you don’t like your dry cleaner or contractor, and post a poor review of their services, it is fairly straight forward to assess blame. Your contractor, for example, can reply to your post and review about their performance, and give the public their version of events. The doctor, on the other hand, is bound by privacy laws and there fourth doesn’t have the luxury of a posting a public reply.

This situation has the potential to create postings that rate doctors as slightly one sided. To counter this side effect the more reputable web sites won’t post any anonymous postings, so any patient who chooses this public forum to rate doctors, does so with their name also attached. But despite these safeguards, a patient can choose to leave out information or exaggerate information to suite their rating, even if they don’t do it intentionally.

Advocates, who favor the rating system, argue that these web sites, allow patients to have a voice and be heard in the medical world. The medical world, as patient advocates point out, can be an intimidating system to navigate.

Some could argue the point that having a web site that allows patients to rate doctors levels the playing field and gives both sides some power and a voice. Doctors after all have been used to having the final say and having all of the power in these relationships. It has only been lately with the help of the internet that patients have been able to surf the web and get some insight into their own medical condition, tipping the sense of power into balance.

Still, despite the pros and cons of a system that can rate doctors as easily as it can rate your contractor, it is doubtful that these web sites will disappear or loose their ability to alter perceptions. However, patients who post reviews should strive to be accurate, factual and honest and consumers who read the reviews for guidance should be careful to not dismiss a doctor based on one bad review, bearing in mind that not all of the facts are being laid out from just one person’s perspective.

Advocating for Autism – An Overwhelming Success, or Is It?

For almost a half century those advocating for autism have seen

• Improved diagnostic procedures

• New medications

• Many new training tools for children

• Improved types of therapy

o Applied Behavioral Analysis

o Speech therapy

• Many states now provide improved education for special needs children

• Many states now require autism to be covered by insurance

With the autism incidence going from 1 in 10,000 in the early 1960s to 1 in 88 as recently reported by the CDC and projections of increasing at a rate of more than 20% per year, one would have to describe autism as a growth industry.

A good thing for service providers, but not good for the parents or children.

Unfortunately those advocating for autism have not seen

• The cause for autism being identified

• Tools developed for prediction of autism—before symptoms develop

• Tools developed for early intervention that will eliminate the risk of autism

• Any procedures for the prevention of autism

• Any treatments, medications, or therapies that will cure autism

Advocating for the Elimination of Autism – The Path to Greater Success

• First we need to know the cause – The major cause for autism is a poor diet; also, the greatest risk factor for children with autism.

• Then prediction will be possible – Research has shown predictions based upon fifteen environmental and dietary factors are accurate more than 95% of the time.

• With accurate prediction, most risks identified can be totally eliminated

• Proper early intervention will then prevent the development of autism symptoms

• With prevention, you will eliminate the epidemic of autism over time – No new cases

Success measured in this manner would show

• Fewer children having to experience growing up with these symptoms

• Elimination of the long wait for the first appointment

• Significant reductions in special needs children in our schools

• Significant reductions in the money spent for medical services

• Fewer families would be disrupted or broken up and would not experience the financial ruin often reported

This is a personal invitation to anyone who is or wants to advocate for autism. Please put some strings on your advocacy so that any monies or support goes toward the cause, prevention, and ultimately the elimination of autism. Autism has been extensively researched since 1960 and they have not yet identified the cause! After all, it was only 1903 that man was first able to fly but only sixty-six years later man walked on the moon. When using volunteers and taxpayer monies I believe the effort should be to help the children and their families rather than growing the business of autism.