Rates are up a touch as the market has yet to see what will happen with Phase II to the TARP stimulus package. The new administration is certainly going to put some restrictions and accountability on the next batch of money distributed. This has caused some uncertainty in the bond market and the 10 year yield is up about .30 basis points since the beginning of the week.

“ Investors weigh recession concerns and a record supply of debt headed to market. The 30-year bond slides more than shorter maturities on long term inflation concerns.”

This is the headline on the bond page this morning ringing true to the long term concerns of these low rates. Traders are smart enough to know that the printing of all this money will cause inflation in the future. Albeit, inflation will certainly not happen immediately, traders look to the down the road as to how we will pay for all of this newly printed money.

Rates are still fantastic right now and just a tad up from our record lows. The main thing we must convey to our borrowers is that zero point loans are a thing of the past right now. If you look at the pricing you will see a large disparity between zero and 1 point loans. This difference can be as much as a .5%. Depending on the loan amount, this means that you may be able to make up the 1 point in costs within a year. It is certainly better to go with a 1 point loan versus a zero point loan in this lending environment.

Please let us know if we can help in any way this weekend. Our toll free number pages me. Have a great weekend.

-Dean Rathbun