Illinois Mortgage Rates and News

Illinois Mortgage Rates – Rants, Raves and Consumer Education from a long time Chicago, IL Home Mortgage Banker.

Peter Thompson - Illinois Mortgage Broker


Chicago Illinois Mortgage Rates Week in Review for the Week Ending 04/09/2012

14th May 2012

Feeling frustrated because you haven’t heard enough about Greece lately? For a good portion of the last year, the financial news seemed to talk about nothing but Greece. Band aids have been applied, and when the band aid didn’t stop the bleeding, the financial equivalent for duct tape was Chicago Illinois current mortgage rates, Chicago FHA mortgage rates for today generously wrapped around it, but it is looking like that will not be enough, and Greece is back in the new in a big way again. Last week Greece had their elections, and in a reaction to the severe austerity programs they have taken on (in order to show some signs of wanting to pay down their debt so they can stay in the European Union) minority parties on both the far right and far left fringes took large percentages of the vote. In a parliamentary system, if no one party has enough votes to govern on their own, they have to find partners to form a coalition with other groups. If Republicans and Democrats can’t agree on anything, what are the chances of agreement between Nazis and Communists (or the modern Greek versions)? If Greece is not able to form a new coalition government, they will have a new election on June 17th to try again. It is now looking more likely that Greece will exit the European Union, and strike out on its own. Greece by itself is a small economy and not much of a global factor, but the fear is that if Greece exits, what will happen to Spain, and Italy and the European Union itself. This is the financial domino theory in action, and if Greece falls, what happens next? This whole drama has been going on for a long time, but experts are thinking the end game is coming soon.

The other big news this week was JP Morgan’s announcement of trading losses of at least $2 billion dollars. This wasn’t a rogue trader making a bad bet, but part of their risk management strategy, approved at the very top of the corporate chain. This has been embarrassing for CEO Jaime Dimon who has been viewed as the one who got it right in the financial crisis, and has been a big opponent of more financial regulation. The trade involved the same derivatives that were involved in the collapse back in 2008, and is a reminder that with vast leverage and a betting mentality in the financial system, there are still risks to the system that have not been addressed.

Mortgage bonds traded in a range all week. Several time they hit approached their best points historically, before pulling back. Mortgage rates are at or near their best levels ever. What happens next will largely depend on the news out of Europe, but if you are looking to buy a new home or refinance your existing mortgage, the timing is great and mortgage rates are low.

These are the current Chicago Illinois Home mortgage rates for an A+ (740 Fico or above), full doc single family home purchase or rate/term refinance on a 45 day rate lock, with 0 points, and no origination fee, best FHA rates assume a 640 Fico score, but loans are available with credit scores as low as 580. Mortgage rates in other states may be slightly different, give me a call and I will give you an accurate quote for your particular situation. The conventional and FHA rates are based on the highest conforming loan amounts, which give the best pricing. Again, there are many factors which affect mortgage rates and your ability to be approved for a loan, including credit scores, property type, amount of down payment and a number of other factors. These rates may not fit your situation and this is just a sample of the programs that are out there. If you would like a quote for your personal situation, or to get pre-approved for a mortgage, give me a call or contact me (Illinois mortgage company) and I will take the time to find the rate and program that is best for you:

Conventional loans up to $417,000

30 year fixed rate 3.875% 4.063%  APR
15 Year fixed Rate 3.25% 3.359%  APR
5-1 A.R.M. 2.875% 3.067%  APR
7-1 ARM 3.125% 3.264%  APR

 

For Jumbo loans over $417,000

30 Year Fixed Rate* 4.75% 4.839%  APR

*(Another option is to break your Jumbo loan into 2 parts a conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

3–1 ARM Jumbo 3.25%  w/ 0 points 3.367%
5-1 ARM Jumbo 3.375%    w/ 0 points 3.554%
7-1 ARM Jumbo 3.625%  w/ 0 points 3.758%
5-5 A.R.M. ** 3.875%  w/ .5 points 3.987%** APR
5-5 A.R.M. ** 3.625% w/ 1 Point 3.768%    APR

** 5-5 ARM is fixed for first 5 years, with 2/6 caps it can’t go more than 2% above the start rate for the next 5 years. 2% cap for next 5 years – so a blended rate over 10 years is no more than 1% over the start rate. Super Jumbos available.

FHA LOANS 3.5% down payment FHA Maximum varies by County

FHA 30 year fixed 4.00% with 0Pt  4.645% APR
FHA 30 year fixed 3.75% with 1.0 Pts 4.679% APR
FHA 5-1 ARM 3.625% with 0Pt 3.996% APR
FHA 5-1 ARM 3.375% with 1 Pts 4.137% APR

FHA APR reflects 3.5% down payment and the effect of mortgage insurance on the loan. Call for information on no-cost FHA streamlined Refinances

FHA 203K Rehab Loans – Call for Current Quote – FHA 203k Rehab and Renovation loans are now available as 30 year fixed or 5-1 ARMs.

VA Veterans Administration 0 Down Loans

VA 30 Year Fixed Rate  4.00% with 0Pt  Origination 4.645% APR
VA 30 Year Fixed Rate 3.875% with 1 Pts 4.732% APR

 

These are just a few of the mortgage programs and mortgage rates available. Which option is best for you depends on your own specific goals and needs. If you have any questions or want to go over your situation in depth, let me know how I can help.

Free Home Buyers Guide

You can trust in us to get the job done.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages


 

Posted in Economics and Trends, Illinois Mortgage Rate Weekly Update, Opinions and Prognostications | No Comments »




Chicago Illinois Mortgage Rates Week in Review for the Week Ending 05/04/2012

7th May 2012

It looks like mortgage rates are inching down again, as the monthly jobs report came in lower than expected. The monthly jobs report is without fail the most watched economic report in the financial markets. If employment is rising, this is an indication that the economy as a whole is Chicago Illinois current mortgage rates, Chicago FHA mortgage rates for today strengthening, and an increase in jobs means increasing optimism, and spending and becomes a virtuous circle. Over the last six months, there have been signs that not only has the worst of the downturn passed, but that we were starting to build a slow, but steady recovery. So far this year the economy has gained over 800,000 new jobs, much better than where we were at this time last year. But last month’s report was less than expected, and the numbers this month also disappointed. Expectations were for an increase of about 178,000 new jobs, but the real number (for now, there are always adjustments later) came in at 115,000. The big question now is whether the economy has lost steam and we are in danger of slipping back into recession, or if the numbers over the last few months which were so much better than expected were really weather related, and the gains came early because of the unseasonable warmth. In the same release, the unemployment rate dropped from 8.2% to 8.1%. This rate is figured through a different method, and though it sounds like good news, the rate dropped because of less participation in the survey, not more jobs. Mortgage bonds rallied on Friday, and are now back near their lowest levels.

Attention is again focused on Europe as Francois Hollande, a Socialist, won the election for President of France over the weekend. The two dominant economies in Europe have been Germany and France, and up until now they have held together on the policy of austerity as the means to solve Europe’s debt crisis. Many of the smaller and more troubled countries, including Greece and Spain, have been forced to cut spending drastically, which has increased civil unrest. The Socialist position is that the only way to get out of the hole is to spend more and grow their way out, a direct contradiction to the German plan. This plan will have lots of support from those countries in the worst shape, but without a consensus plan, it means more conflict, and a great chance that each country will pull back and work toward their best interests rather than a unified plan for the European Union as a whole. Expect more volatility in the financial markets as a result.

Here are the current Chicago Illinois Home mortgage rates for an A+ (740 Fico or above), full doc single family home purchase or rate/term refinance on a 45 day rate lock, with 0 points, and no origination fee, best FHA rates assume a 640 Fico score, but loans are available with credit scores as low as 580. Mortgage rates in other states may be slightly different, give me a call and I will give you an accurate quote for your particular situation. The conventional and FHA rates are based on the highest conforming loan amounts, which give the best pricing. Again, there are many factors which affect mortgage rates and your ability to be approved for a loan, including credit scores, property type, amount of down payment and a number of other factors. These rates may not fit your situation and this is just a sample of the programs that are out there. If you would like a quote for your personal situation, or to get pre-approved for a mortgage, give me a call or contact me (Illinois mortgage company) and I will take the time to find the rate and program that is best for you:

Conventional loans up to $417,000

30 year fixed rate 3.875% 4.063%  APR
15 Year fixed Rate 3.25% 3.359%  APR
5-1 A.R.M. 3.00% 3.136%  APR
7-1 ARM 3.25% 3.349%  APR

 

For Jumbo loans over $417,000

30 Year Fixed Rate* 4.75% 4.839%  APR

*(Another option is to break your Jumbo loan into 2 parts a conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

3–1 ARM Jumbo 3.25%  w/ 0 points 3.367%
5-1 ARM Jumbo 3.375%    w/ 0 points 3.554%
7-1 ARM Jumbo 3.625%  w/ 0 points 3.758%
5-5 A.R.M. ** 3.875%  w/ .5 points 3.987%** APR
5-5 A.R.M. ** 3.625% w/ 1 Point 3.768%    APR

** 5-5 ARM is fixed for first 5 years, with 2/6 caps it can’t go more than 2% above the start rate for the next 5 years. 2% cap for next 5 years – so a blended rate over 10 years is no more than 1% over the start rate. Super Jumbos available.

FHA LOANS 3.5% down payment FHA Maximum varies by County

FHA 30 year fixed 4.00% with 0Pt  4.645% APR
FHA 30 year fixed 3.75% with 1.0 Pts 4.679% APR
FHA 5-1 ARM 3.625% with 0Pt 3.996% APR
FHA 5-1 ARM 3.375% with 1 Pts 4.137% APR

FHA APR reflects 3.5% down payment and the effect of mortgage insurance on the loan. Call for information on no-cost FHA streamlined Refinances

FHA 203K Rehab Loans – Call for Current Quote – FHA 203k Rehab and Renovation loans are now available as 30 year fixed or 5-1 ARMs.

VA Veterans Administration 0 Down Loans

VA 30 Year Fixed Rate  4.00% with 0Pt  Origination 4.645% APR
VA 30 Year Fixed Rate 3.875% with 1 Pts 4.732% APR

 

These are just a few of the mortgage programs and mortgage rates available. Which option is best for you depends on your own specific goals and needs. If you have any questions or want to go over your situation in depth, let me know how I can help.

Free Home Buyers Guide

You can trust in us to get the job done.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages


 

Posted in Economics and Trends, Illinois Mortgage Rate Weekly Update, Opinions and Prognostications | No Comments »




Chicago Illinois Mortgage Rates Week in Review for the Week Ending 04/20/2012

23rd April 2012

The trend in the financial markets recently has been high volatility. Last week was relatively calm. Mortgage backed securities moved in a narrow range, and mortgage rates hardly moved from the beginning of the week through the end. The reports released last week were mostly Chicago Illinois current mortgage rates, Chicago FHA mortgage rates for today disappointing and gave more proof that the economy is not going to roar forward. At the same time, it doesn’t look like we are going to slip back into a recession, just a period of slow growth, that is not enough to pull the economy out of the ditch. The weekly initial unemployment claims came in at 386,000, slightly higher than the previous average. Both housing starts and existing home sales were down, but the inventory of homes for sale were down too, and it seems that home prices are stabilizing. On the positive side, retail sales came in at .8% above the previous month, and 6.5% above where they were a year ago. This is a good sign that consumers are feeling positive enough about the future that they are willing to spend money again.

Though last week was tame, this week may be a wilder ride. The FOMC (Fed Open Market Committee) meets again this week, and will release their minutes on Wednesday, and Fed Chairman Bernanke will also have a press conference. The major interest in this meeting is whether the Fed is any closer to announcing another round of quantitative easing to stimulating the economy. Their goal, if they do this, is to lower rates further and force banks to lend more money instead of holding it in reserves. The consensus now is that this is wishful thinking on the part of stock investors, but unless the economy shows real signs of declining further, they are more likely to stand pat with their current strategy. Either way, expect volatility. The European situation is back on the front burner again, too. The Socialist candidate beat the incumbent in the first round of the French elections, forcing a run off. His message was that the French could grow their way out of their problems, a direct strike against the austerity plan. I expect the markets will be volatile this week, but rates are still hovering near their all time lows, and this is a great time to take advantage of these low rates.

 Here are the current Chicago Illinois Home mortgage rates for an A+ (740 Fico or above), full doc single family home purchase or rate/term refinance on a 45 day rate lock, with 0 points, and no origination fee, best FHA rates assume a 640 Fico score, but loans are available with credit scores as low as 580. Mortgage rates in other states may be slightly different, give me a call and I will give you an accurate quote for your particular situation. The conventional and FHA rates are based on the highest conforming loan amounts, which give the best pricing. Again, there are many factors which affect mortgage rates and your ability to be approved for a loan, including credit scores, property type, amount of down payment and a number of other factors. These rates may not fit your situation and this is just a sample of the programs that are out there. If you would like a quote for your personal situation, or to get pre-approved for a mortgage, give me a call or contact me (Illinois mortgage company) and I will take the time to find the rate and program that is best for you:

Conventional loans up to $417,000

30 year fixed rate 4.00% 4.159%  APR
15 Year fixed Rate 3.375% 3.469%  APR
5-1 A.R.M. 3.00% 3.136%  APR
7-1 ARM 3.25% 3.349%  APR

 

For Jumbo loans over $417,000

30 Year Fixed Rate* 4.75% 4.839%  APR

*(Another option is to break your Jumbo loan into 2 parts a conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

3–1 ARM Jumbo 3.25%  w/ 0 points 3.367%
5-1 ARM Jumbo 3.375%    w/ 0 points 3.554%
7-1 ARM Jumbo 3.625%  w/ 0 points 3.758%
5-5 A.R.M. ** 3.875%  w/ .5 points 3.987%** APR
5-5 A.R.M. ** 3.625% w/ 1 Point 3.768%    APR

** 5-5 ARM is fixed for first 5 years, with 2/6 caps it can’t go more than 2% above the start rate for the next 5 years. 2% cap for next 5 years – so a blended rate over 10 years is no more than 1% over the start rate. Super Jumbos available.

FHA LOANS 3.5% down payment FHA Maximum varies by County

FHA 30 year fixed 4.125% with 0Pt  4.765% APR
FHA 30 year fixed 3.875% with 1.0 Pts 4.734% APR
FHA 5-1 ARM 3.625% with 0Pt 3.996% APR
FHA 5-1 ARM 3.375% with 1 Pts 4.137% APR

FHA APR reflects 3.5% down payment and the effect of mortgage insurance on the loan. Call for information on no-cost FHA streamlined Refinances

FHA 203K Rehab Loans – Call for Current Quote – FHA 203k Rehab and Renovation loans are now available as 30 year fixed or 5-1 ARMs.

VA Veterans Administration 0 Down Loans

VA 30 Year Fixed Rate  4.00% with 1Pt  Origination 4.847% APR
VA 30 Year Fixed Rate 4.25% with 0 Pts 4.926% APR

 

These are just a few of the mortgage programs and mortgage rates available. Which option is best for you depends on your own specific goals and needs. If you have any questions or want to go over your situation in depth, let me know how I can help.

Free Home Buyers Guide

You can trust in us to get the job done.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages


 

Posted in Economics and Trends, Illinois Mortgage Rate Weekly Update, Opinions and Prognostications | No Comments »




Chicago Illinois Mortgage Rates Week in Review for the Week Ending 04/13/2012

17th April 2012

In a lot of ways, the weather here in the Chicago area has mirrored the economy. After a short, mild Winter, Spring came early this year. Flowers are blooming and everything is green. It looks like Spring and feels like Spring, but for anyone familiar with weather in these parts, the fear is still Chicago Illinois current mortgage rates, Chicago FHA mortgage rates for today there that this is too good to be true. In the back of our minds, we are all waiting for a frost or a late season snow storm. The view on the economy has been similar. After a brutal downturn, we see lots of signs of rebirth, but the feeling was that the optimism is a little too good to be true. The weather is holding, but recent signs show some frost in the economic world. Over the last few months, most of the economic reports have been coming in better than expected. More recently the reports are just hitting expectations, or coming in lower than expected. But the big storm front has been Europe, and the belief that they’d fixed their problems is now starting to fade. The focus is on Spain now, and as their bond yields rise, the risk of default looms. The big problem in Europe is that what is good for Spain (and all the other debtor countries), is not good for Germany, which was the biggest lender to the Euro market. So while Germany pushes for more belt tightening, the other economies push back, and demand looser credit and the chance to grow their way out of debt, even if this means inflation. The cold front in Europe increases the likelihood of frost here.

Mortgage rates have stabilized, and the MBS (Mortgage Backed Securities) market improved this last week. With so much uncertainty, no one knows what the future direction will be, but the trend line is tipping back to the lower range. Rates are not likely to drop much more, though. In the past when rates dropped to this level, they went back and forth in a fairly narrow range. Unless something unexpected happens in Europe, the next thing likely to move rates will be any statements by the Fed tipping their hand about future policy (Bernanke will be holding a press conference later this week). Home buyers are feeling more confident than they have in years, and the market is active. It makes sense to take advantage of these low rates now.

Here are the current Chicago Illinois Home mortgage rates for an A+ (740 Fico or above), full doc single family home purchase or rate/term refinance on a 45 day rate lock, with 0 points, and no origination fee, best FHA rates assume a 640 Fico score, but loans are available with credit scores as low as 580. Mortgage rates in other states may be slightly different, give me a call and I will give you an accurate quote for your particular situation. The conventional and FHA rates are based on the highest conforming loan amounts, which give the best pricing. Again, there are many factors which affect mortgage rates and your ability to be approved for a loan, including credit scores, property type, amount of down payment and a number of other factors. These rates may not fit your situation and this is just a sample of the programs that are out there. If you would like a quote for your personal situation, or to get pre-approved for a mortgage, give me a call or contact me (Illinois mortgage company) and I will take the time to find the rate and program that is best for you:

Conventional loans up to $417,000

30 year fixed rate 4.00% 4.159%  APR
15 Year fixed Rate 3.375% 3.469%  APR
5-1 A.R.M. 3.00% 3.136%  APR
7-1 ARM 3.25% 3.349%  APR

 

For Jumbo loans over $417,000

30 Year Fixed Rate* 4.75% 4.839%  APR

*(Another option is to break your Jumbo loan into 2 parts a conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

3–1 ARM Jumbo 3.25%  w/ 0 points 3.367%
5-1 ARM Jumbo 3.375%    w/ 0 points 3.554%
7-1 ARM Jumbo 3.625%  w/ 0 points 3.758%
5-5 A.R.M. ** 3.875%  w/ .5 points 3.987%** APR
5-5 A.R.M. ** 3.625% w/ 1 Point 3.768%    APR

** 5-5 ARM is fixed for first 5 years, with 2/6 caps it can’t go more than 2% above the start rate for the next 5 years. 2% cap for next 5 years – so a blended rate over 10 years is no more than 1% over the start rate. Super Jumbos available.

FHA LOANS 3.5% down payment FHA Maximum varies by County

FHA 30 year fixed 4.125% with 0Pt  4.765% APR
FHA 30 year fixed 3.875% with 1.0 Pts 4.734% APR
FHA 5-1 ARM 3.625% with 0Pt 3.996% APR
FHA 5-1 ARM 3.375% with 1 Pts 4.137% APR

FHA APR reflects 3.5% down payment and the effect of mortgage insurance on the loan. Call for information on no-cost FHA streamlined Refinances

FHA 203K Rehab Loans – Call for Current Quote – FHA 203k Rehab and Renovation loans are now available as 30 year fixed or 5-1 ARMs.

VA Veterans Administration 0 Down Loans

VA 30 Year Fixed Rate  4.00% with 1Pt  Origination 4.847% APR
VA 30 Year Fixed Rate 4.25% with 0 Pts 4.926% APR

 

These are just a few of the mortgage programs and mortgage rates available. Which option is best for you depends on your own specific goals and needs. If you have any questions or want to go over your situation in depth, let me know how I can help.

Free Home Buyers Guide

You can trust in us to get the job done.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages


 

Posted in Economics and Trends, Illinois Mortgage Rate Weekly Update, Opinions and Prognostications | No Comments »




Chicago Illinois Mortgage Rates Week in Review for the Week Ending 04/06/2012

9th April 2012

Its all about expectations. Last week was one of the most volatile weeks in the MBS (Mortgage Backed Securities) market, as traders whipsawed back and forth trying to divine the future of the economy. Mortgage rates spiked sharply higher on Tuesday after the meetings from the last Fed Chicago Illinois current mortgage rates, Chicago FHA mortgage rates for today meeting were released. The minutes confirmed what we already knew, that there is a difference of opinion among Fed members as to how strong this recovery is, and that the consensus for now is that a new round of Quantitative Easing (pumping more money into the economy) is off the table for now. In a way we live in Bizarro World now. The stock market has been fueled by QE, and possibilities of another round have been a bigger driver of values than current earnings. The intent of QE is to buy more bonds and keep rates low, but the last time we went through this rates dropped up until the program was in place, then spiked sharply higher. So when the Fed minutes confirmed that another round of easing was not in the offing, it was a surprise to most analysts that rates took as big a hit as they did.

But the bigger news came on Friday with the release of the monthly Jobs report. This is usually the most anticipated report, and this Friday’s report didn’t disappoint. We have seen a streak of good releases, and expectations were for this to also come in strong. Expectations were for an increase of about 200,000 new jobs, and expectation was that the number could come in stronger. The actual number was 120,000. With the weak numbers money flowed into bonds, and mortgage rates dropped back down to their previous range, the best they have been in the last month. The question now is whether the economy is really stalling, or if this is just an isolated blip. It is common to revise the numbers and the same report revised the previous month higher than first reported. The drop in employment also increased the likelihood of another round of QE down the road.This means the next release will be even more important as traders look for signs as to where we are heading. The other big factor to watch is what is happening in Europe, and though this has been on the back burner for the last month, it is starting to heat up again. Spain is feeling the effects of austerity, and their bond yields spiked last week. If you are buying a new home or refinancing your current mortgage, rates are near all time lows.

Here are the current Chicago Illinois Home mortgage rates for an A+ (740 Fico or above), full doc single family home purchase or rate/term refinance on a 45 day rate lock, with 0 points, and no origination fee, best FHA rates assume a 640 Fico score, but loans are available with credit scores as low as 580. Mortgage rates in other states may be slightly different, give me a call and I will give you an accurate quote for your particular situation. The conventional and FHA rates are based on the highest conforming loan amounts, which give the best pricing. Again, there are many factors which affect mortgage rates and your ability to be approved for a loan, including credit scores, property type, amount of down payment and a number of other factors. These rates may not fit your situation and this is just a sample of the programs that are out there. If you would like a quote for your personal situation, or to get pre-approved for a mortgage, give me a call or contact me (Illinois mortgage company) and I will take the time to find the rate and program that is best for you:

Conventional loans up to $417,000

30 year fixed rate 4.00% 4.159%  APR
15 Year fixed Rate 3.375% 3.469%  APR
5-1 A.R.M. 3.00% 3.136%  APR
7-1 ARM 3.25% 3.349%  APR

 

For Jumbo loans over $417,000

30 Year Fixed Rate* 4.75% 4.839%  APR

*(Another option is to break your Jumbo loan into 2 parts a conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

3–1 ARM Jumbo 3.25%  w/ 0 points 3.367%
5-1 ARM Jumbo 3.375%    w/ 0 points 3.554%
7-1 ARM Jumbo 3.625%  w/ 0 points 3.758%
5-5 A.R.M. ** 3.875%  w/ .5 points 3.987%** APR
5-5 A.R.M. ** 3.625% w/ 1 Point 3.768%    APR

** 5-5 ARM is fixed for first 5 years, with 2/6 caps it can’t go more than 2% above the start rate for the next 5 years. 2% cap for next 5 years – so a blended rate over 10 years is no more than 1% over the start rate. Super Jumbos available.

FHA LOANS 3.5% down payment FHA Maximum varies by County

FHA 30 year fixed 4.125% with 0Pt  4.765% APR
FHA 30 year fixed 3.875% with 1.0 Pts 4.734% APR
FHA 5-1 ARM 3.625% with 0Pt 3.996% APR
FHA 5-1 ARM 3.375% with 1 Pts 4.137% APR

FHA APR reflects 3.5% down payment and the effect of mortgage insurance on the loan. Call for information on no-cost FHA streamlined Refinances

FHA 203K Rehab Loans – Call for Current Quote – FHA 203k Rehab and Renovation loans are now available as 30 year fixed or 5-1 ARMs.

VA Veterans Administration 0 Down Loans

VA 30 Year Fixed Rate  4.00% with 1Pt  Origination 4.847% APR
VA 30 Year Fixed Rate 4.25% with 0 Pts 4.926% APR

 

These are just a few of the mortgage programs and mortgage rates available. Which option is best for you depends on your own specific goals and needs. If you have any questions or want to go over your situation in depth, let me know how I can help.

Free Home Buyers Guide

You can trust in us to get the job done.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages


 

Posted in Economics and Trends, Illinois Mortgage Rate Weekly Update, Opinions and Prognostications | Comments Off




Chicago Illinois Mortgage Rates Week in Review for the Week Ending 03/30/2012

2nd April 2012

Fed Chairman Ben Bernanke helped put a brake on rising interest rates last week by talking about the jobs market and stating "we can’t be sure the recent pace of improvement can be sustained." In other words, he expects rate will remain low for a long time. This helped Chicago Illinois current mortgage rates, Chicago FHA mortgage rates for today ease pressure on mortgage rates which improved slightly for the week, before losing some of the gains on Friday afternoon. The economic data released last week was mixed. The University of Michigan Consumer Sentiment Index improved slightly from the previous month, which is an indication that consumers are more willing to spend. Weekly unemployment claims declined again, and the reading now is at its best level since the Spring of 2008. Durable goods orders came in lower than expectations, and the Case Schiller housing report showed prices still falling, even though more homes are being sold. This coming week a lot of reports will be released, including the monthly employment report on Friday. Expect mortgage rates to remain extremely volatile.

The housing market has gotten off to a fast start this year, and articles have popped up about how housing is now rebounding. Home sales are up and with owning a home comparing well to renting, a lot of buyers have taken the plunge and made the decision to be home owners. I love the optimism, and this has been the best start of the year that I have personally seen in years, but I think this may be a little premature to think we are truly out of the woods. Part of the reason for caution is the same thing we have been dealing with for the last four years, the shadow inventory. There are still a tremendous amount of homes that are in default of their mortgage, or bank owned. If prices start to go up, or inventory falls, the banks will put these homes on the market rather than holding them back, as they are now. It will still take a while to clear through the excess inventory. Also, unemployment is still too high, and housing needs a strong economy to fully recover. But my bigger concern is that it is going to be hard to keep the housing engine going if we continue to make it harder for buyers to finance their purchases. FHA mortgages make up about 40% of new mortgages, and with their low down payment and less strenuous credit requirements, FHA is the best alternative for most first time home buyers. Starting next week, FHA is increasing their costs, and adding some restrictions which will keep otherwise well qualified buyers on the sidelines. FHA is raising their mortgage insurance costs in order to build up their reserve fund and keep the program solvent (FHA has never had a bailout, unlike Fannie, Freddie and all the big banks). This makes a lot of sense on one level, but if raising the price when the market is still fragile lowers demand, it may do more harm than good. The other big change is that FHA will now require any borrowers with collection accounts over $1,000 to pay these off prior to closing, or they will have to show they have a payment plan established. Again, this sounds good on paper, but up until now there has been an exception for medical collections. This isn’t in the current rule. It is not unusual to find someone with otherwise excellent credit history, who has open medical collections. Sometimes these are items that should have been paid by insurance. This will surely knock more people out of the housing pool.

 Here are the current Chicago Illinois Home mortgage rates for an A+ (740 Fico or above), full doc single family home purchase or rate/term refinance on a 45 day rate lock, with 0 points, and no origination fee, best FHA rates assume a 640 Fico score, but loans are available with credit scores as low as 580. Mortgage rates in other states may be slightly different, give me a call and I will give you an accurate quote for your particular situation. The conventional and FHA rates are based on the highest conforming loan amounts, which give the best pricing. Again, there are many factors which affect mortgage rates and your ability to be approved for a loan, including credit scores, property type, amount of down payment and a number of other factors. These rates may not fit your situation and this is just a sample of the programs that are out there. If you would like a quote for your personal situation, or to get pre-approved for a mortgage, give me a call or contact me (Illinois mortgage company) and I will take the time to find the rate and program that is best for you:

Conventional loans up to $417,000

30 year fixed rate 4.125% 4.247%  APR
15 Year fixed Rate 3.375% 3.469%  APR
5-1 A.R.M. 3.00% 3.136%  APR
7-1 ARM 3.25% 3.349%  APR

 

For Jumbo loans over $417,000

30 Year Fixed Rate* 4.75% 4.839%  APR

*(Another option is to break your Jumbo loan into 2 parts a conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

3–1 ARM Jumbo 3.25%  w/ 0 points 3.367%
5-1 ARM Jumbo 3.50%    w/ 0 points 3.632%
7-1 ARM Jumbo 3.75%  w/ 0 points 3.843%
5-5 A.R.M. ** 3.875%  w/ .5 points 3.987%** APR
5-5 A.R.M. ** 3.625% w/ 1 Point 3.768%    APR

** 5-5 ARM is fixed for first 5 years, with 2/6 caps it can’t go more than 2% above the start rate for the next 5 years. 2% cap for next 5 years – so a blended rate over 10 years is no more than 1% over the start rate. Super Jumbos available.

FHA LOANS 3.5% down payment FHA Maximum varies by County

FHA 30 year fixed 4.25% with 0Pt  4.837% APR
FHA 30 year fixed 4.00% with 1.0 Pts 4.895% APR
FHA 5-1 ARM 3.75% with 0Pt 3.996% APR
FHA 5-1 ARM 3.50% with 1 Pts 4.137% APR

FHA APR reflects 3.5% down payment and the effect of mortgage insurance on the loan. Call for information on no-cost FHA streamlined Refinances

FHA 203K Rehab Loans – Call for Current Quote – FHA 203k Rehab and Renovation loans are now available as 30 year fixed or 5-1 ARMs.

VA Veterans Administration 0 Down Loans

VA 30 Year Fixed Rate  4.00% with 1Pt  Origination 4.847% APR
VA 30 Year Fixed Rate 4.25% with 0 Pts 4.926% APR

 

These are just a few of the mortgage programs and mortgage rates available. Which option is best for you depends on your own specific goals and needs. If you have any questions or want to go over your situation in depth, let me know how I can help.

Free Home Buyers Guide

You can trust in us to get the job done.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages


 

Posted in Economics and Trends, Illinois Mortgage Rate Weekly Update, Opinions and Prognostications | Comments Off




Chicago Illinois Mortgage Rates Week in Review for the Week Ending 03/23/2012

26th March 2012

Mortgage rates have moved up over the last few weeks as fear of collapse in Europe has made way for optimism for an improved economy here. Mortgage rates have been in a narrow range near all time lows for most of the last seven months. With the fear of an implosion in Greece off Chicago Illinois current mortgage rates, Chicago FHA mortgage rates for today the table, for now, and a temporary solution to the other European hot spots in place, the financial world has breathed a sigh of relief. The big news that set up the shift in rates was the news that the Fed is not about to start a new round of quantitative easing, which some were expecting. This policy, in effect bringing more money into circulation to force banks to lend is considered inflationary, which is usually bad news for bonds. But the expectation that something was on the horizon has kept a lot of investors in the belief that the Fed will do anything that they can to support these extremely low rates. With the announcement that this isn’t the plan for the immediate future, money rushed out of bonds and into stocks. The Catch 22 for the Fed is that the economy is still fragile and unemployment is still way too high. Chairman Bernanke and several other Fed members consider unemployment a bigger risk than inflation, but in order to pump more money into the economy, which should mean an improvement in employment, they need to see worse economic figures, and the general trend now is improving. As fear recedes, mortgage rates have blipped up slightly, but are still near all time lows.

Most of the reports released this last week were focused on housing. The outlook for housing has been improving, but most of the numbers this week were softer than expected. Housing starts were less than expected, existing home sales came in just short of expectations and new home sales, which are up from all time lows, were also less than expected. But I don’t think these numbers tell the whole story. There arte always blips from month to month, but the attitude from consumers now is different. Anecdotally, based on the people I talk with every day, both Realtors and borrowers, there is more demand and more excitement about buying a home than there has been in years. a lot of the reason for this is because people in general are feeling better about their own job prospects, and feel they can take a chance for the future. A lot of it also has to deal with affordability. In many cases it is now cheaper to buy a home than it is to rent one. The weather this year is also a big factor, but the market is already booming and we haven’t even started the Spring market. As more people get their tax refunds in hand, more first time home buyers will step into the market, and we are just hitting that stage now.

In other mortgage news, Harp 2 is now officially live. The big GSE’s Fannie Mae and Freddie Mac have updated their software approval systems so that the value of the property is built into the system, in most cases eliminating the need for appraisals. This new program will allow borrowers whose loans are backed by Fannie or Freddie to refinance their loans at the current lower rates, even if they owe much more than the home is worth. This has been a major frustration for many borrowers who have made their payments as agreed, but had the bad luck of buying when values were close to their peak. This program won’t help everyone. It is limited to loans that closed before June 1st 2009, eliminating all the people who bought in the last few years. There also may be overlays which mean the rates for this program may be higher than the best current rates. But this will be a big help for a lot of homeowners, and a great way to save money over time. I will post with all the details in the next few days.

Here are the current Chicago Illinois Home mortgage rates for an A+ (740 Fico or above), full doc single family home purchase or rate/term refinance on a 45 day rate lock, with 0 points, and no origination fee, best FHA rates assume a 640 Fico score, but loans are available with credit scores as low as 580. Mortgage rates in other states may be slightly different, give me a call and I will give you an accurate quote for your particular situation. The conventional and FHA rates are based on the highest conforming loan amounts, which give the best pricing. Again, there are many factors which affect mortgage rates and your ability to be approved for a loan, including credit scores, property type, amount of down payment and a number of other factors. These rates may not fit your situation and this is just a sample of the programs that are out there. If you would like a quote for your personal situation, or to get pre-approved for a mortgage, give me a call or contact me (Illinois mortgage company) and I will take the time to find the rate and program that is best for you:

Conventional loans up to $417,000

30 year fixed rate 4.125% 4.247%  APR
15 Year fixed Rate 3.375% 3.469%  APR
5-1 A.R.M. 3.00% 3.136%  APR
7-1 ARM 3.25% 3.349%  APR

 

For Jumbo loans over $417,000

30 Year Fixed Rate* 4.75% 4.839%  APR

*(Another option is to break your Jumbo loan into 2 parts a conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

3–1 ARM Jumbo 3.25%  w/ 0 points 3.367%
5-1 ARM Jumbo 3.50%    w/ 0 points 3.632%
7-1 ARM Jumbo 3.75%  w/ 0 points 3.843%
5-5 A.R.M. ** 3.875%  w/ .5 points 3.987%** APR
5-5 A.R.M. ** 3.625% w/ 1 Point 3.768%    APR

** 5-5 ARM is fixed for first 5 years, with 2/6 caps it can’t go more than 2% above the start rate for the next 5 years. 2% cap for next 5 years – so a blended rate over 10 years is no more than 1% over the start rate. Super Jumbos available.

FHA LOANS 3.5% down payment FHA Maximum varies by County

FHA 30 year fixed 4.25% with 0Pt  4.837% APR
FHA 30 year fixed 4.00% with 1.0 Pts 4.895% APR
FHA 5-1 ARM 3.75% with 0Pt 3.996% APR
FHA 5-1 ARM 3.50% with 1 Pts 4.137% APR

FHA APR reflects 3.5% down payment and the effect of mortgage insurance on the loan. Call for information on no-cost FHA streamlined Refinances

FHA 203K Rehab Loans – Call for Current Quote – FHA 203k Rehab and Renovation loans are now available as 30 year fixed or 5-1 ARMs.

VA Veterans Administration 0 Down Loans

VA 30 Year Fixed Rate  4.00% with 1Pt  Origination 4.847% APR
VA 30 Year Fixed Rate 4.25% with 0 Pts 4.926% APR

 

These are just a few of the mortgage programs and mortgage rates available. Which option is best for you depends on your own specific goals and needs. If you have any questions or want to go over your situation in depth, let me know how I can help.

Free Home Buyers Guide

You can trust in us to get the job done.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages


 

Posted in Economics and Trends, Illinois Mortgage Rate Weekly Update, Opinions and Prognostications | Comments Off




Chicago Illinois Mortgage Rates Week in Review for the Week Ending 03/09/2012

12th March 2012

The good new for this week is that there has been plenty of good news, and mortgage rates still remain in their low range. This week Greece consolidated it’s rescue plan, with the majority of debt holders ratifying the agreement. Though the saga is surely not over, and focus now Chicago Illinois current mortgage rates, Chicago FHA mortgage rates for today may shift to one of the other troubled European economies, this has been the biggest fear for most of the past year, so even a temporary solution that no one really believes will work is good news. The unemployment report released on Friday was more good news. The report showed an increase of 227,000 new jobs created in February, almost all of them in the private sector. This number was better than expected, and confirmation of the trend. The previous 2 months jobs were also revised higher. The unemployment rate, which is figured based on a different method, came in flat at 8.3%, but the experts expected that number would be higher as new life in the job market brought in more people off the sidelines who had not been actively looking before. This has still been a very slow recovery, but its hard to discount these numbers, and it looks like the jobs recovery is slowly gaining traction. Other economic indicators like the ISM non-manufacturing index (a measure of growth in the service sector) were also positive, more proof of an expanding economy.

In normal circumstances, good news for the economy pushes money out of the comparatively safe, but low yielding bonds (specifically Treasury bonds and mortgage backed bonds) and into riskier stocks which may have more of an upside if the economy is improving. When fear is in the air, investors seek safety, and money rushes into the safer havens of bonds, especially those with Federal guarantees. We saw our lowest rates ever when it looked like Greece was going to go up in flames, and take the entire European Union with it. In normal times a small upside to the monthly jobs report can send mortgage rates sharply higher. But if you look at Treasury Bonds (considered the safest investment) or mortgage backed securities (which are the basis of mortgage rates), the range is holding. The question is, Why? Is the financial community seeing the dark clouds even though the sky seems sunnier? Are they still anticipating major problems in the world economy, even though the headlines show improvement? I think we can agree that these are not normal times, and even the good news has plenty of asterisks attached, which means uncertainty. The fear has been pushed back, but it is still on the table. Mortgage rates have been flat this week, and almost exactly the same as where they ended the previous week. We may have some more clues to future direction when the Fed meets this week and gives their report.

On another note, FHA came out with a new plan for Streamline Refinances this week. I will write in more detail on this in the next few days, but this is good news for some, but it won’t help anyone who bought a home or refinanced their mortgage recently. This new plan will grandfather the monthly mortgage insurance premium at .55%, instead of the current rate which is over double that (and it is going up next month). Even though mortgage rates are near all time lows, most FHA home owners weren’t able to refinance as the higher mortgage insurance took away the advantage of getting the lower rate. This new program solves that problem, but only for people who closed on their loan before June 1st 2009. This cuts out all the people who bought with FHA over the last 3 years, when FHA was one of the only ways for most first time home buyers to buy a home. Again, I will have more details in the next few days.

Here are the current Chicago Illinois Home mortgage rates for an A+ (740 Fico or above), full doc single family home purchase or rate/term refinance on a 45 day rate lock, with 0 points, and no origination fee, best FHA rates assume a 640 Fico score, but loans are available with credit scores as low as 580. Mortgage rates in other states may be slightly different, give me a call and I will give you an accurate quote for your particular situation. The conventional and FHA rates are based on the highest conforming loan amounts, which give the best pricing. Again, there are many factors which affect mortgage rates and your ability to be approved for a loan, including credit scores, property type, amount of down payment and a number of other factors. These rates may not fit your situation and this is just a sample of the programs that are out there. If you would like a quote for your personal situation, or to get pre-approved for a mortgage, give me a call or contact me (Illinois mortgage company) and I will take the time to find the rate and program that is best for you:

Conventional loans up to $417,000

30 year fixed rate 4.00% 4.159%  APR
15 Year fixed Rate 3.25% 3.379%  APR
5-1 A.R.M. 2.875% 2.967%  APR
7-1 ARM 3.125% 3.237%  APR

 

For Jumbo loans over $417,000

30 Year Fixed Rate* 4.625% 4.793%  APR

*(Another option is to break your Jumbo loan into 2 parts a conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

3–1 ARM Jumbo 3.00%  w/ 0 points 3.147%
5-1 ARM Jumbo 3.50%    w/ 0 points 3.632%
7-1 ARM Jumbo 3.75%  w/ 0 points 3.843%
5-5 A.R.M. ** 3.875%  w/ .5 points 3.987%** APR
5-5 A.R.M. ** 3.625% w/ 1 Point 3.768%    APR

** 5-5 ARM is fixed for first 5 years, with 2/6 caps it can’t go more than 2% above the start rate for the next 5 years. 2% cap for next 5 years – so a blended rate over 10 years is no more than 1% over the start rate. Super Jumbos available.

FHA LOANS 3.5% down payment FHA Maximum varies by County

FHA 30 year fixed 4.00% with 0Pt  4.676% APR
FHA 30 year fixed 3.75% with 1.0 Pts 4.697% APR
FHA 5-1 ARM 3.50% with 0Pt 3.885% APR
FHA 5-1 ARM 3.25% with 1 Pts 4.076% APR

FHA APR reflects 3.5% down payment and the effect of mortgage insurance on the loan. Call for information on no-cost FHA streamlined Refinances

FHA 203K Rehab Loans – Call for Current Quote – FHA 203k Rehab and Renovation loans are now available as 30 year fixed or 5-1 ARMs.

VA Veterans Administration 0 Down Loans

VA 30 Year Fixed Rate  3.875% with 1Pt  Origination 4.638% APR
VA 30 Year Fixed Rate 4.00% with 0 Pts 4.724% APR

 

These are just a few of the mortgage programs and mortgage rates available. Which option is best for you depends on your own specific goals and needs. If you have any questions or want to go over your situation in depth, let me know how I can help.

Free Home Buyers Guide

You can trust in us to get the job done.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages


 

Posted in Economics and Trends, Illinois Mortgage Rate Weekly Update, Opinions and Prognostications | Comments Off




Chicago Illinois Mortgage Rates Week in Review for the Week Ending 03/02/2012

5th March 2012

The good news for this week is that I won’t be talking about Greece today. That doesn’t mean that Europe is out of the picture, though, as Spain is now the new topic of worry in the financial markets. Chicago Illinois current mortgage rates, Chicago FHA mortgage rates for todaySpain missed some financial projections, and rather than bowing to the demands for more austerity, they insist they will fix things on their own. So for those of you who have gotten sick of hearing about Greece, the news may have a Spanish flavor for a while.

In domestic economic news, the trend is still positive, but the results last week were mixed. Unemployment claims fell to 350,000, the best we’ve seen since the credit collapse in 2008. The big news on employment will be to see if this strong trend is still meaning new hires, and we will get that reading on Friday. Auto and light truck sales were through the roof in February, after a tepid report the month before. On the other side, the ISM manufacturing index, which has been strong over the last several months, dipped lower. he Case Schiller index showed home prices dropping again, and now shows that home prices are at the same levels they were back in 1998. Its as if the whole 2000s were a bad dream, and though prices exploded and then collapsed, we are now right back to where we were before. This is obviously not good news if you are a home owner (especia lly if you bought in the early to mid 200s), but there is always a flip side, and for those looking to buy a home now, he cost of buying a home now is equivalent  to what you would pay in rent.

Mortgage rates are still in the same range we have been over the last few months, and basically unchanged from where they were the week before. But there has been a lot of volatility within this general stability. Mortgage rates increased earlier in the week, before the bond and mortgage backed securities markets rallied on Friday. We are near the top end of the range, and the news this week may determine whether we settle back into the lower end of the range (where rates have been most of the the last 2 months) or break through to higher rates. Part of this is Fed speculation (will they come in with another round of quantitative easing to get rates lower, or do they expect the positive trends in the economy to continue), part of it will be based on the situation in Europe and whether the markets are as afraid of the Spanish situation as they were of Greece, and a big part will be based on what happens on Friday when the new jobs report for February is released. Though mortgage rates are slightly higher than they were a few weeks ago, we are still near historic lows. If you are buying a home or refinancing your mortgage, you can eliminate a lot of stress by locking in your rate at application.

Here are the current Chicago Illinois Home mortgage rates for an A+ (740 Fico or above), full doc single family home purchase or rate/term refinance on a 45 day rate lock, with 0 points, and no origination fee, best FHA rates assume a 640 Fico score, but loans are available with credit scores as low as 580. Mortgage rates in other states may be slightly different, give me a call and I will give you an accurate quote for your particular situation. The conventional and FHA rates are based on the highest conforming loan amounts, which give the best pricing. Again, there are many factors which affect mortgage rates and your ability to be approved for a loan, including credit scores, property type, amount of down payment and a number of other factors. These rates may not fit your situation and this is just a sample of the programs that are out there. If you would like a quote for your personal situation, or to get pre-approved for a mortgage, give me a call or contact me (Illinois mortgage company) and I will take the time to find the rate and program that is best for you:

Conventional loans up to $417,000

30 year fixed rate 4.00% 4.159%  APR
15 Year fixed Rate 3.25% 3.379%  APR
5-1 A.R.M. 2.875% 2.967%  APR
7-1 ARM 3.125% 3.237%  APR

 

For Jumbo loans over $417,000

30 Year Fixed Rate* 4.625% 4.793%  APR

*(Another option is to break your Jumbo loan into 2 parts a conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

3–1 ARM Jumbo 3.00%  w/ 0 points 3.147%
5-1 ARM Jumbo 3.50%    w/ 0 points 3.632%
7-1 ARM Jumbo 3.75%  w/ 0 points 3.843%
5-5 A.R.M. ** 3.875%  w/ .5 points 3.987%** APR
5-5 A.R.M. ** 3.625% w/ 1 Point 3.768%    APR

** 5-5 ARM is fixed for first 5 years, with 2/6 caps it can’t go more than 2% above the start rate for the next 5 years. 2% cap for next 5 years – so a blended rate over 10 years is no more than 1% over the start rate. Super Jumbos available.

FHA LOANS 3.5% down payment FHA Maximum varies by County

FHA 30 year fixed 4.00% with 0Pt  4.676% APR
FHA 30 year fixed 3.75% with 1.0 Pts 4.697% APR
FHA 5-1 ARM 3.50% with 0Pt 3.885% APR
FHA 5-1 ARM 3.25% with 1 Pts 4.076% APR

FHA APR reflects 3.5% down payment and the effect of mortgage insurance on the loan. Call for information on no-cost FHA streamlined Refinances

FHA 203K Rehab Loans – Call for Current Quote – FHA 203k Rehab and Renovation loans are now available as 30 year fixed or 5-1 ARMs.

VA Veterans Administration 0 Down Loans

VA 30 Year Fixed Rate  3.875% with 1Pt  Origination 4.638% APR
VA 30 Year Fixed Rate 4.00% with 0 Pts 4.724% APR

 

These are just a few of the mortgage programs and mortgage rates available. Which option is best for you depends on your own specific goals and needs. If you have any questions or want to go over your situation in depth, let me know how I can help.

Free Home Buyers Guide

You can trust in us to get the job done.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages


 

Posted in Economics and Trends, Illinois Mortgage Rate Weekly Update, Opinions and Prognostications | Comments Off




Big Changes Coming to FHA on April 1st – Mortgage Insurance Premiums are Going Up, Change is Seller Closing Cost Credit

28th February 2012

Some big changes will be made to FHA loans starting April 1st, which will
increase the cost of FHA financing, and change the way seller closing cost
credits are structured.
The first change is that FHA will increase the cost of both
the monthly and up-front mortgage insurance. The other big change is cappingChicago area FHA mortgages, FHA mortgages in Chicago and suburbs
the seller closing cost credit at 3% of the purchase price (currently it is at 6%), or a maximum of $6,000.

Regarding the mortgage insurance change, FHA divides their mortgage
insurance premium into two parts, an up-front premium that is usually added
onto the mortgage balance and financed into the loan, and a monthly premium
similar to conventional PMI. Starting on loans registered as of April 1st, the up-
front premium will be increased from 1.0% to 1.75%.
On a $200,000 loan, this
means a change in payment of about $7 based on current interest rates. FHA is
also changing the monthly mortgage insurance, increasing it by .10% for loans
under $625,000
(which means everything but some 3 and 4 units here in the
Chicago area). The current factor is 1.15% of the loan amount (divided by 12),
the increase will make the factor 1.25% after April 1st. On that same $200,000
loan, this means a change in payment of about $16, so the two increases
combined will increase the cost for a buyer by about $23 per month.
For loans
over $625,000, again, only multi-units here in the Chicago area, the monthly
premium will be increased by .35, to a total of 1.45% per year.

These increases aren’t enough enough to make a difference in qualifying for
most borrowers, and with mortgage rates as low as they are, the total payment
on an FHA purchase is still competitive with rents in many cases, and FHA
financing is still the best, and only, route for many borrowers.
The reason
they are making this change is to shore up the reserve fund and keep FHA
solvent. While Fannie Mae and Freddie Mac have been bailed out by the federal
government, FHA has remained solvent, paying for losses out of their own funds.
Part of this was because FHA wasn’t a big factor during the housing bubble,
and the reserve fund has been sufficient to pay out all claims against it. But over
the last few years, FHA market share has risen from about 2% up to over 40%
currently, and the reserve fund has shrunk below the congressionally mandated
level. These increases are expected to raise over $1 billion through 2013, and
keep the program running without a federal bailout.

The other big change will cap the seller closing cost credit at 3% of the purchase
price, or $6,000, whichever is greater.
The biggest obstacle to buying a home
is usually coming up with the money for the down payment and closing costs.
The FHA down payment is a minimum of 3.5%, but closing costs usually run
about $3,500 to $4,000, and more if there is a transfer tax involved. It is common in the market now, for the buyer to negotiate for the seller to pay the closing costs. They first proposed capping closing costs about a year ago. They didn’t go through with the change then because dropping the credit would hurt those who needed it the most, the lower and moderate income buyers. If you are buying a
home for $200,000, a 3% seller credit is $6,000, more than enough to pay for
all the normal closing costs. If you are buying a $60,000 home, that same 3% is
only $1,800, meaning buyers of smaller homes would need a lot more cash out
of their own pockets in order to close. The new rule caps the closing cost credit
at 3% of the sales price, or $6,000, whichever is greater. This means that the
buyers of lower priced homes can still buy without having to come up with a lot
more cash than they otherwise would. To me, this seems like a fair way to handle
this, and as it is rare to see a credit of more than $6,000, I don’t expect this will
have much of an effect on the market.

If you are looking to buy soon, and plan to use FHA financing, this might be a reason to
move a little faster. If you have any questions, or if I can help in any way, please let me know.

Free Home Buyers Guide

You can trust in us to get the job done.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages


 

Posted in FHA, First Time Home Buyers, Mortgage Programs | Comments Off