Financial Update by Maurice Soussé

Happy Friday,

Rates are holding steady from last week. You will notice on the fixed rates that there is very little difference in the rates between a 1 point and zero point loan. This is great for buyers as it is saving them money in closing costs. Traditionally there is a .25% difference in rates making the payback about 60 months into the loan to break even when paying 1 point. Lately, with only .125% difference, the payback is about 9 years, which means a zero point option is better. The majority of our loans right now are zero points for owner occupied and second homes; the borrower of course makes the final choice.

Per CNNMoney this morning, they state that bond market is headed for a bumpy road. Bond investors are concerned with the deficit, interest rates, inflation and unrest in the Middle East. Their overall fear is that Treasury yields are just too low. Treasuries dictate our mortgage rates. Keep an eye on the 10 year treasury bills; if you see the yields rise, so will mortgage rates.

I love the line from Dennis Green who says “The secret to success is to start from scratch and keep on scratching”

Have a blessed weekend.