Q. Can you tell me how mortgage rates are figured? In other words, what makes the rate available what it is? We want to refinance our home but our lender is not very responsive. We want to learn more to be better educated.

---R.S., by e-mail


A. The mortgage rate you may be offered is determined by two major factors. The first is the length of time the money will be committed. The second is the lenders' assessment of your ability to repay the money borrowed.

It is often possible to get a lower rate by taking a shorter-term mortgage--- one where the interest rate is adjusted after 3 or 5 years. This is much less risky for the lender than a 30-year commitment. You can also cut your interest rate by taking a mortgage with a 15-year term rather than a 30-year term. You can check local mortgage rates by visiting a website like www.bankrate.com or www.banxquote.com.

The difference can be substantial. Recently, the national average on 30-year mortgages was 6.64 percent but you could get 6.13 percent on 15-year mortgages, 5.88 percent on 5-year adjustable mortgages, and 5.26 percent on 3-year adjustable mortgages, according to bankrate.com.

The second factor, your credit record, can work to increase the rate you pay. It can also prevent you from getting a mortgage.

If your current mortgage holder is unenthusiastic about refinancing you shouldn't be surprised--- there's nothing in it for the lender except smaller interest payments. What many borrowers don't understand is that getting a mortgage is seldom a matter of visiting a lender and borrowing the money. Today, you are dealing with a mortgage broker, a lender, a mortgage service company, and the securities market that may eventually own the mortgage as part of a package of mortgages.

My suggestion. Be patient. Learn the types of mortgages available. Gather your paperwork. Check your credit report. Make certain that you understand the cost of completing a refinancing.


Q. What is your opinion of the "doomsayers" who are running for financial cover from a possible catastrophic event? By catastrophic event I am not referring to GE failing to make it's earnings projections. I am referring to the likes of a "dirty" nuclear bomb (I remember when they were all considered "dirty."), anthrax from the air, or some other catastrophic terrorist act. Would it be prudent to shift a percentage of assets to U.S. government obligations?

--- M.T., Dallas, TX


A. This group of doomsayers will have to get in line with all the others predicting the End of Life as We Now Know It. We can worry about the return of age-old diseases like tuberculosis and malaria or the rise of new plagues like the hantu virus. We can be concerned about global warming or the development of wildly destructive weather patterns. We can contemplate possible aggression from China as its billions of people eye our consumption of world resources. We can worry about an old-fashioned worldwide monetary debacle. We can fret about a rapidly developing global water shortage. Or, lacking imagination, we can simply read the newspaper and worry about a spreading, catastrophic war in the Middle East. Take your pick or add other worries to the list.

The only answer to cosmic worries is close attention to what is at hand in our own lives. That means we participate in the world as it is, we invest in the world as it is, and we prepare to cope with uncertainty, change, and upheaval as best we can.

Some readers will call this a passive response. It isn't. One of the sure signs someone is taking a mental vacation is when they want to speculate about what the future will bring. We can act responsibly and prudently in the present, on an intimate and community present. We can't act responsibly and prudently in the abstract future.