Financial Update by Maurice Soussé

Interest rates were on a tear this week with an upward push. Mr. Bernanke’s comments last week sent our treasury markets into a tailspin. While we thought this might be a short blip, it has held on and rates are higher across the board. To put it in perspective, rates have gone up .375% and in some cases a .5% on fixed rate products. The 10 year treasury closed at 2.12 today versus 1.68% about 3 weeks ago. Yeow…

Many economists see this as a sign of the beginning of an interest rate increase. While we may have a few days that the rates drop, it is a definite reminder that these rates are at record lows and we must take advantage of them while they are here.

To be clear, these rates are still at historic lows and anyone locking now will still look back in 5 years and belly laugh with happiness at the rates they have. You can be sure of that!

As these interest rates rise, it is more important than ever to let us know the day a contract is entered so we can lock right away. To refresh you on our float down policy, at the time of loan documents, we will look at the current rates. If the rate is lower by a .25% or more, we can execute a float down for the borrower. It is always prudent to lock at application on a purchase. Of course, some clients want to float and watch.

A good saying I heard the other day is “The best ways to persuade people is with your ears – by listening to them” – Dean Rusk