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Non-Tech : Dorsey Wright & Associates. Point and Figure -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (1545)	11/6/1999 4:05:00 PM
From: OX	Respond to of 9427

G. That's a pretty interesting article. I wonder why he uses 20yrs instead of 10yrs... (30yr) mortgages normally track 10yr T notes.

To: Gottfried who wrote (1545)	11/7/1999 5:14:00 PM
From: TimbaBear	Read Replies (1) \| Respond to of 9427

OT I have not done his calculations, however, his method appears to be good for only the short term....someone refinancing a 15 or 30 year note is looking beyond the 1 year horizon his method gives....it might be OK if you are currently purchasing/refinancing and want to ride his method by getting an ARM, but you have to make sure your note has a conversion feature that allows you to convert to a fixed rate when you want, otherwise you pay the refinancing costs all over again and stand to lose more than you gain by cleverness....most conversion options have fees and windows, so one would need to factor those elements as well. It sounds like a clever idea and that it would probably be OK for an indicator, but would be more risk than savings. To me, it belongs with the idea that if one were to make an extra mortgage payment a year they would significantly reduce the term of the mortgage....an accurate idea that receives virtually no following because it is impractical....most families are never able to come up with an extra mortgage payment a year and if they are, they have other more pressing needs for the money. I advise my clients to pay an extra amount toward principal every month and to make it an amount small enough so that if they had it back in their budget, it wouldn't make a difference(like $30/month), do it for a year and if it didn't ever come close to mattering, then bump it a little more, etc.