Illinois Mortgage Rates and News

Welcome back first time home buyers.  This is the second of a three-part series outlining the main financial benefits to home ownership:  Principal Reduction, Appreciation, and Tax Advantages.  From a real estate investment perspective, appreciation is an important benefit to home ownership.

Property appreciation is one of the great things about owning real estate. Up until the last few years, it was considered a given that home prices would always rise. Home prices have risen steadily over the years, but since the real estate bubble popped in 2008, home prices have fallen – sharply in some areas. If you bought a home in 2005 or 2006, chances are your home value dropped to a lot less than what you paid for it.  But prices are determined by supply and demand. With the crash in prices, home builders mostly stopped building new homes.  As the economy improves, the extra supply on the market will gradually be absorbed, and supply and demand will balance out.  At some point prices will start rising again (as I write this in the Spring of 2013, home prices are starting to move up). Appreciation isn’t an automatic, but historically, home prices have risen at least at the rate of inflation. I think appreciation will be a bigger factor again moving forward. When appreciation is positive, this is a great way to build wealth. Here’s an example:

If you buy a home for $200,000, and the market appreciates, that is the property values increase, by just 3% per year, at the end of 5 years your home will be worth about $232,000. At the end of 10 years it would be worth about $269,000.

In this example, you’ve increased your equity by nearly $69,000 while living in your own home. There’s no guarantee of what home values will be in the future, but this illustrates what has happened in many communities in the past.

Let’s take this a step further. Let’s say you bought this same home for $200,000, but that you took out a mortgage for 95% of the price, or $190,000, over 30 years at 4.00% interest. At the end of the 10^th year, your mortgage balance will be paid down to about $149,700.  If, through appreciation, the value has grown to $269,000, your equity is now worth over $119,000. Not bad for an investment of only $10,000.

Appreciation is the reason so many people are able to move up to a larger house after owning for a period of time. Having the extra money to use as a down payment, gives you the buying power to buy a home for your growing family, or maybe the chance to move into your dream home. Appreciation is one of the key benefits of homeownership.

Next week we’ll cover the Tax Advantages to being a homeowner.  In the meantime, if you have any questions, give me a call and let me know how I can help.

When you’re a first time home buyer, there are so many reasons for owning a home:  the pride of having a place of your own, the need to establish roots, the joy of being able to have a place where you can express your own personality and style.  Buying a home lets you take control of your own home, a control you don’t have when you rent.  With mortgage rates at their lowest point so far this year, it’s a great time to review the financial benefits of owning a home.  Welcome to the first of a three-part series that covers the three main financial benefits to homeownership:  Principal Reduction, Appreciation, and Tax Advantages.

Principal Reduction:  First of all, a quick explanation. With most mortgages, each payment is divided into two portions—principal and interest.  Interest is the amount the lender charges for the use of their money over the time you hold the mortgage.  Principal is the amount of the mortgage you are paying back each month.  Interest is charged on the outstanding loan balance each month, so at the beginning of the mortgage, most of the payment goes to pay off the interest portion. But with each payment you make, you pay off a little more of the principal, and the loan balance goes down a little more each month.  Let me give you an example to help explain (the interest rates here are just examples, the actual rates are determined by your situation and market conditions at the time):

If you borrow $100,000 at 4.0% interest over 30 years, your mortgage payment each month is $477. On your first payment, about $333 will go to pay the interest, and about $144 will go toward the principal. That means after one payment, your loan has been reduced by $144 to $99,856. Each month a little more of the payment goes toward reducing your principal, and a little less goes to pay off the interest. Over time this principal reduction adds up. If you stay in this house, and this mortgage, for the whole 30 years, you’ll have paid off the entire mortgage and you’ll own the home free and clear. But in the early years, you are paying off mostly interest, and chances are, you won’t be in that same home 30 years from now.  There are other, bigger, benefits to homeownership.  In the following two weeks we’ll cover Appreciation and Tax Advantages to being a homeowner.  In the meantime, if you have any questions, would like a quote or to get pre-approval, give me a call and let me know how I can help.

While we have seen rate increases in the early part of 2013, the end of April showed record lows for the year so far. Finance reporters and rate strategists watch the economic trends, they are discussing a casino-like scenario where buyers are gambling to hold out for a better rate or lock in the current ones. To further assist the market, new mortgage delinquencies are at 6 year lows which should help to gently apply the brakes to the foreclosure situation that has kept home values at bay; although the effects will take a while to ripple through the system. There is still a major foreclosure buying opportunity in the marketplace. Estimates still have foreclosures representing over 40% of home sales here in the Chicagoland area, but the number is heading downward.

Factors that cause light volatility in mortgage interest rates will continue for the near future. The jobless numbers have been on a mild roller coaster so far this year and have had an effect on interest rates. As we see jobless claims decrease (more people working), the interest rates tend to trend upward as optimism for home sales increases. We are also likely to see the effects of the federal government’s fiscal policies and stalemates have further effects on interest rates this year, which will lead to uncertainty in both the stock market as well as mortgage interest rates.

As the economic trends illustrate, the mortgage market continues to be strong for those that qualify for a mortgage. There are numerous factors which affect mortgage rates and your ability to be approved for a loan, such as credit scores, amount of down payment, property type, and a number of other factors. 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 and I will take the time to find the rate and program that is best for you.

Mortgage rates have steadily risen since the beginning of the year as signs showed the U.S. economy was growing, and the global economy had stabilized. A big part of the renewed optimism was the view that Europe was on the mend, and through selective austerity, the European Union would hold together and the status quo would survive. Well, what goes up comes back down, old is new again and Europe is back in the headlines. The focus now is Italy, and the election results last week showed that it may be a while before they find a true solution to the European economic crisis. In an upset of expectations, the biggest winner in the election was a comedian leading an anti-establishment party. The right and left wings split, and in Italy’s parliamentary system, it looks doubtful that anyone will be able to make alliances to form a working government. This is seen as a rejection of the austerity policies, and a big monkey wrench thrown into the gears of EU stability. The result in the markets was a rush to safety, and mortgage rates dropped to their lowest point of the year.

On the home front, the economic reports have been steadily improving, but congress is doing their best to keep things unsettled. When congress and President Obama came up with the idea of a sequester, automatic severe budget cuts that would hurt the priorities of both party’s, it was put in place with the assumption that it would never come to pass. At the time, this was a way to kick the can further down the road and avoid making unpopular decisions. But in our dysfunctional system, no one seems willing to compromise, so as of Friday, the sequester is on. Despite all the dire predictions, the world hasn’t ended. Yet. Most of the budget cuts won’t go into effect for months yet, and there is still a chance that there will be a political work around. In the mean time, the next line in the sand is coming up as the government budget will need to be approved again by the end of the month, and congressional Republicans are getting excited about the possibility of shutting down the government if they don’t get their way. The economy has been steadily improving, but this all makes you wonder where we would be if politics weren’t holding us back.

While congress does it’s best to stomp on the brake, Fed Chairman Bernanke continues to push on the accelerator. In testimony before congress this week, he stated that the Fed will continue it’s policy of buying back treasury and mortgage backed bonds in an effort to keep rates low. This policy has fueled the recovery and the Fed will continue this until the unemployment rate has dropped to 6%, which most experts say could be 2016. Knowing interest rates are likely to remain low has helped the housing market tremendously, and signs are that the economy will continue to grow this year.

If you are looking to buy a home soon, you’ve probably seen a change in the market. Listings are selling faster, inventory of homes for sale is tighter, and it is now common to see multiple offers so you are competing against other buyers when a contract comes together. Home prices are still low and with low interest rates homes are very affordable, but the market has shifted from a buyers advantage to a seller’s advantage. This means more pressure on buyers, as the good properties are going fast. One thing you can do to make sure you are in the best position to buy, is to make sure you are pre-approved for a mortgage before you start looking for a home. This means knowing exactly what you can afford, and how much it will cost you, and making sure there won’t be any problems that will keep you from closing on your home. A pre-approval starts with a quick, over the phone conversation. If you would like a rate quote, 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

The consensus in the markets now, is that the worst of the decline is behind us, and the economy is on the mend. The economic data last week was mixed. Reports showed that the overall US economy shrank in the last quarter of last year, the first time we have seen a fall in the last 3 years, with GDP coming in .1% lower than the previous quarter. But this was mostly a result of a drop in government spending, and private industry continues to grow. The Case Schiller home index shows housing prices are moving higher, consumer confidence came in strong and China came in with strong manufacturing  numbers, another indication that the global economy is better than expected. The Big Kahuna of reports is always the monthly jobs report, and this month showed an increase of 157,000 jobs, while the unemployment rate ticked a touch higher to 7.9%. The numbers came in right about where expected, but the revisions of the two previous months showed that the economy added over 100,000 more jobs than was previously reported. It’s likely that the unemployment rate will continue to tick higher now, as more people who have stopped looking come off the sidelines and start looking for jobs again.

Again, the markets are looking at these signs as more evidence that the worst is over. First, the stock market closed on Friday above 14,000 in the Dow Jones average, the first time since October of 2007. This happened after a week of better than expected earning reports, but the bigger reason the index went higher may have been a result of investors moving money out of bonds and into stocks. Stocks are considered a riskier investment, so when there are dark clouds on the economic horizon, investors are less concerned about making big profits and more concerned about preserving what they have. This has been the case over the last several years, and a big reason why interest rates have been locked in at historic lows. But lately, it seems that the market tides are shifting, and fixed income bonds aren’t perceived as the safe haven they were before. Last week the bond markets, both treasury bonds and mortgage backed securities, gyrated around like crazy. Volatility is now the norm and there were re-prices on mortgage rates several days last week, meaning that the price you were quoted in the morning, may have changed by the afternoon. On Friday, after the release of the jobs report, mortgage rates initially reacted to the positive, with mortgage backed bonds surging to their best point of the week. But that didn’t last long. Over the course of the day mortgage rates got hit, and ended the sharply lower from the highs of the day with a slight loss for the. No one knows where we go from here, but those waiting for mortgage rates to drop lower, may be in for a long wait.

If you would like a rate quote, 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

Mortgage rates blipped sharply higher last week after a trifecta of optimism hit the market. One of the biggest reasons interest rates are so low, is because of fear that the European Union is, and has been, on the verge of collapse. To stave off the collapse the ECB, Europe’s version of the Fed, lent out cheap money to banks throughout the continent to maintain liquidity in the system. Last week they announced that more than half the banks participating in the program will be paying off the loans as soon as they are contractually able to (this week). That is much better than expected, and a sign that the overall economy is in much better shape than has been projected.Rates dropped into their lowest range when the markets expected that the European Union was about to collapse, so this good news is indeed bad news for the lower trend in mortgage rates. Earlier in the week the initial unemployment claims number came in at 330,000, which meant 4 straight weeks of decreasing unemployment. This gauge is now at its lowest point since early 2008. No one is saying that the job market is great, but this is more evidence that the economy is gradually improving. Which brings us to the third hit of the trifecta of optimism, the Fed. Probably the biggest reason mortgage rates have stayed so low, is because the Fed Open Market Committee  has continued its policy (the latest twist on qualitative easing) of buying back mortgage bonds specifically to keep rates low and encourage growth in the housing market. They have previously announced that they will continue this policy until unemployment hits 6.5%, or inflation risk is too high. This week, 2 Fed members made comments that were interpreted as being willing to halt the program at an earlier date or with a higher level of unemployment.

This week is going to be a critical week and is expected to be extremely volatile in the mortgage backed securities market, which directly impacts mortgage rates. The FOMC meets Tuesday and Wednesday and will announce their policy statement at the end of the meeting. It is expected to stay the same, for now, but any change in wording will be parsed for hidden meaning. On Friday the Jobs report for January will be released, which is always the most anticipated report for the month, and spikes in rates often come with better than expected numbers. We will also get more data of what is happening in Europe. If optimism continues, mortgage rates could continue to climb.

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

For a good part of last year, the financial markets moved up and down based on whatever was happening in Europe. The problems there aren’t fixed, but this has moved firmly to the backburner as all the attention now is focused on our own political issues. We have been muddling along and the US economy has been slowly but steadily improving, and unemployment has slowly but steadily been dropping. The biggest crises we have now seem to be of our own making. We came into the New Year courting disaster, and ground the brakes down to dust as we stopped just short of the fiscal cliff. The agreement didn’t really end anything though, it just forced a break in the action so the two political parties could re-group for the next battle. For our next crisis, we are bumping up against the debt ceiling again and this will have to be extended sometime in the next month or the Government will run out of funds to pay it’s bills. The last time this happened, the President and the Republican led house came to an agreement at the last minute, which basically kicked the can a little further down the road. But the process was so ugly and the dysfunction was so obvious that bond rating agency Standard and Poors downgraded the credit of the United States. That turned out to be less of a problem then expected, since we were still head and shoulders above the rest of the world, and investors continued to bid for our debt in spite of the downgrade. But as we approach round two, businesses and financial markets face more uncertainty, which means more caution in committing to anything. Chances are we will get past this crisis intact, too, but lurching from disaster to disaster without solving anything or making any real changes seems to be our way of governing now. You wonder how much better off we would be if both parties tried working together for the common good, for a change?

We are still dealing with the effects of the housing bust, and this last week, they just came out with the new rules for the Qualified Residential Mortgage (QRM). The idea behind this is to set a standard, which all banks and mortgage lenders will abide by, of what a safe and sustainable mortgage is. In a way, this is closing the barn door long after all the horses have all gone, since underwriting now is much tighter than it was before and all the crazy loan products that helped fuel the crisis have been abandoned, along with the demise of most of the riskiest lenders. These new rules will go into place next January, and this is another form of tightening, since many borrowers who can qualify for mortgages under the current, already tight, guidelines, may not be able to qualify for mortgages once the QRM guidelines are in place. The good news though, is it could have been worse. Many projections expected the QRM to focus on down payments and to force higher down payments. This would be a big problem for younger, first time home buyers who struggle to save enough to buy a home. Instead, the guidelines focused on affordability. Balloon mortgages have been all but outlawed (they are a very small part of the market now) Adjustable Rate Mortgages have to be qualified by the highest payment rather than the introductory rate, and in most cases the highest debt ratio allowed will be capped at 43% of a borrower’s income (this includes the mortgage payment and all other debt). It is this last provision which is likely to have the biggest effect on buyer’s qualification. This sounds like a logical way to keep people from overextending themselves and buying more of a house than they can afford. But in reality, we often lower the amount of income we can use for qualifying and borrowers often have more cash available than what we can use in the guidelines. So we can often go much higher in the debt ratio, while still making sure they are safely able to afford the loan. Setting a hard and fast arbitrary limit takes away the flexibility that is currently in the system, and will hurt some otherwise qualified borrowers. There will be a provision, still being worked out, which will set a separate class of mortgages for those going over the ratio, but if this is viewed as a bigger risk for the mortgage lenders, they are apt to ignore this entirely, and stick to the safer ground. We have a year for them to come up with all the details, but at least the industry now knows what to expect.

FHA is also coming up with some big changes soon, but we will cover those later.

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

For Jumbo loans over $417,000

*(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.)

FHA LOANS 3.5% down payment FHA Maximum varies by County

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

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

Happy New Year! Buckle up, it looks like we are going cliff diving. The two parties in Washington are holding hands, Thelma and Louise style, and punching down on the accelerator as they go over, saying goodbye to 2012. Do you ever wonder how much better our economy would be if it wasn’t held back by a completely dysfunctional government? This latest crisis is almost exactly mirroring what happened a year and a half back when the congress and president couldn’t come to an agreement on raising the debt ceiling on time, and as a result Standard and Poors lowered the US credit rating. The good news then was that the investing world ignored the rating drop, US bonds are still considered the safest in the world and rates have dropped sharply since then. The good news now is that even though we are almost surely going over, this is probably not going to have a long term negative effect for us, either. The name fiscal cliff sound scary and drastic, but the truth is that most of the scheduled cuts won’t happen until much later in the year. Tax rates will go up immediately, but everyone assumes that some kind of bill will be passed, probably within the week, lowering taxes on the majority of tax payers, leaving just the top slice (and the arguments now are about how big that slice will be) with higher taxes. There are obviously sticking points between the Republicans and Democrats, but there is enough common ground (lower taxes for most Americans) that some kind of deal should be passed. The problem is that the most conservative Republicans in the House, the Tea Party backed, mostly newer congressman, are against compromising in any way, and they have enough pull within the party to keep anything from being done. Once the new year has passed, and tax rates have automatically gone up (this is part of the sunset provision in the original Bush era tax cuts), they can safely vote for a tax cut, so they have a vested interest in sailing over the cliff. It is now looking more likely that whatever deal does get through, will not be doing much to cut our long term deficit, which has been the whole point of this exercise. The Democrats are focused on getting their tax hike for high earners and adding in some new stimulus spending while making sure their are no changes to social security, and the Republicans have more interest in maintaining existing tax breaks and don’t want to let anything happen to defense spending, so without major spending cuts or significant new revenue, the deficit stays in a holding pattern. That might not be a bad thing. We do have to get the deficit down at some point, but we are a long way from being in a Greece like position, and our bonds are still the envy of the world. Our economy is still soft, and this may not be the best time to attack the deficit. If unemployment drops and more people get jobs and start paying taxes again, this will do a lot to bring down the deficit on its own. In the mean time, this will not be pretty, but we are likely to keep on muddling through.

Case Schiller announced last week that the nation’s real estate market increased in price by 4.3% over the prior year. In their major city survey, all but two metropolitan areas increased in prices. The two that didn’t were New York and Chicago. Ouch! On the flip side, Zillow named Chicago as the top buyer’s market in the nation. If your New Year’s resolution is to buy a new home this year, the timing is right. Mortgage rates are near all time lows, the economy is improving and home prices are still low. I expect we are going to have a roaring market in new home sales the first quarter in 2013, especially if the weather continues to cooperate. If you are looking to buy a home this year, the first step is to be pre-approved for a mortgage and see how much of a home you are able to buy. We can start the process with a short phone call. Let me know if I can help in any way.

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

For Jumbo loans over $417,000

*(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.)

** 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 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

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

In the mortgage industry, the big news last week was the Fed announcement that they will be extending their quantitative easing program and placing economic benchmarks to replace their previous time table. With the announcement, the Fed committed to an additional $45 billion dollars of treasury and mortgage bond purchases each month. The goal of this program is to drive rates lower so that there is a bigger incentive to invest money since the yield is so low. The bigger change was that the dates the program was in effect for have been removed and replaced with specific performance benchmarks. The program will continue until unemployment drops to 6.5%, or on the flip side, inflation moves up to 2.5%. This is the firs time the Fed has given specific guidance to unemployment rates, and they are saying that they are willing to put up with a little extra risk of inflation in order to get the growth we need. The initial market reaction to this announcement was a boost in stock prices and mortgage rates moving a step higher, but by the end of the week both markets remained in their previous range. Worries over the fiscal cliff are still having the biggest near term effect on mortgage rates, and the conventional wisdom now is that there won’t be an agreement until early January at the earliest. Expect to see greater than normal market volatility over the next few weeks. The Holidays are normally thinly traded as many traders take vacation time, so any news will have an outsize impact.

If you are buying a home or refinancing a mortgage in Cook County over the next few months, you will need some extra money at closing for a TI account. Cook County real estate taxes first installment is due March 1st, but the 2012 tax bills are not out yet. If history is a guide, they may still not be out by the due date. What this means is that the lender will require the first installment be paid, and since the bill isn’t out yet and they don’t know what the amount will be, they will require an escrow be set up at the title company for a higher amount than the expected bill. The 1st Installment of 2012 is always the total of 2011 property real estate taxes times 55%, but the amount held in the escrow account is always going to be higher to take tax increases into account. Once the tax bill comes out, whatever money is left in the escrow account after the tax bills are paid will be returned to the borrower. In the meantime, cash out of pocket is going to be higher.

I wish you all a happy holiday season, and our thoughts and prayers go out to the families and victims of the Newton tragedy.

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

For Jumbo loans over $417,000

*(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.)

** 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 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

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

If you have watched the financial news over the last few weeks, you probably get a tinge of anxiety every time you hear the phrase “Fiscal Cliff”. The markets for Treasuries and mortgage bonds moved back and forth over the last week based on each rumor and news clip relating to who had the cards and what was going to be done politically to forge a solution in time. The phrase does sound ominous, and with grid lock built into the system in Washington, the odds of the Republicans and Democrats coming together on a compromise solution before the beginning of the year seems slim, so what will happen if we do go over this cliff? In reality probably not that much, at least at first. The biggest thing that will happen automatically, is that tax rates will rise for everyone after January 1st as the Bush tax cut hits it’s sunset provision, which was built into the original bill and extended for two years. This will be bad news for those in the highest tax brackets, but at some point everyone agrees that there will be a new bill retroactively lowering all the tax rates for everyone else. The rest of the cliff is made up of spending cuts that are again automatically kicking in because of the sequester, which was in a sense a gun being held to both party’s head’s in the hope that it would force them to come up with a workable plan. But the cuts for the sequester don’t kick in on January 1st, they are spread out over the year. Worst case, if no agreement is reached, the higher taxes and lower spending will mean a reduction in economic output, and with the economy still so fragile that would be bad news. At the same time, if nothing is done and all these things happen automatically, the national debt would plummet – which in the long term would be a good thing. I doubt we will ever reach that point. This fiscal cliff seems remarkably like what happened the last time the national spending authority came up for a vote (this will happen again in the first quarter of 2013). Back then we drove right off the cliff. Standard and Poors lowered the US credit rating for the first time in history, and everyone was sure this would lead to doom and gloom. Instead, interest rates fell as investors globally still felt the US was the safest place to put their money, and the economy has steadily and gradually shown signs of improvement. We may go over the cliff again this time, but if we do, the odds are that some kind of agreement (possibly kicking the can further down the road) will be reached sometime in January. Our dysfunctional political system is part of who we are now, but we are likely to continue muddling along in spite of it.

The housing market continues to improve and over the last month has made a true switch from being a buyer’s market to a more balanced market. This is a combination of pent up demand from buyers, and lower inventory of homes for sale. The housing market usually slows down at this time of year as the weather cools down and people focus on the holidays. This is strictly anecdotal, but I’m seeing the market heat up now. New contracts are coming in at a fast pace, and new buyers are coming out of the woodwork to be pre-approved. Part of this is because of what is happening on the sales side. The inventory for bank owned and distressed properties is at the lowest point in the last several years. New foreclosures are down and the banks have been steadily working through their backlog of properties. There are still a lot of homes that haven’t come on the market yet, and this could ease the inventory crunch if the banks start releasing them after the first of the year, but for now there is a little bit of a disconnect as buyers expecting screaming low prices, are getting pushback from sellers who are now often taking in multiple offers to buy. I expect we will have more homes coming on the market after the first of the year and I expect this will be a very active housing market here in the Chicago area.

Mortgage rates have been remarkably stable over the last few weeks, even as the day to day market is volatile. Besides the back and forth with the fiscal cliff, and there is always Europe, the big event will be the Jobs report which will be released Friday morning. This will be impacted by hurricane Sandy, so the economists will have to do more reading between the lines than normal. In the meantime, mortgage rates remain near all time lows.

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

For Jumbo loans over $417,000

*(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.)

** 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 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

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.

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Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages