January 2008

Top 10 Ways to Come Up With a Down Payment for Your First Chicago Area Home

This weekend is Super Bowl Sunday. This is always an exciting time of the year for me, and I’m not just talking about the big game. I expect New England will dominate, and hopefully the Giants will make a game out of it, and we won’t stay tuned just for the commercials. I enjoy the beer and the food and the chance to visit with friends. But that’s not why I’m excited either. Here in Chicago, Super Bowl Sunday traditionally represents the start of the Spring home buying season. As a mortgage banker who loves working with first time home buyers, that’s a great reason to get excited. Are you a first time home buyer in the market for a new home? With the Chicago area home market slow, and interest rates low, this could be the best time in years to buy your first home. It is a buyer’s…

Read More

Why Bad News for the Economy is Good News for Mortgage Rates – How Mortgage Rates Change from Day to Day

  Last week The Fed unexpectedly dropped the discount rate by a full 3/4s of a point. Since then my phone has been ringing off the hook. The Fed is expected to cut rates again today, so my phone should keep ringing. This happens every time the Fed announces a rate cut. Most people assume that a change in the Fed rates will mean a change in the rates charged for mortgages. There is some truth to this, but it isn’t a direct connection. In fact, it’s not uncommon for mortgage rates to jump higher when the Fed lowers the rates. (Last week the market did both – dropping at the announcement, but moving sharply higher by the next day.) So the question is, why does it work this way? The short answer is that the Fed (The Federal Open Market Committee) controls short term rates, and mortgages are priced…

Read More

Illinois Mortgage Rate Weekly Update

Welcome to this week’s Illinois Mortgage Rates and News week in review, my take on the week’s financial news and how it affected Illinois mortgage rates. The week is over and I think I need a drink. Maybe a lot of drinks. Or maybe I just need to hit my head against the wall for a while. Yes, it’s been that kind of week. The mortgage markets – and mortgage rates – moved so far and so fast, down and up and then down again, that I’m pretty sure I’ve got whiplash. It started with the surprise rate cut Tuesday morning (full run down here). Fear and greed took turns at the wheel and mortgage rates dropped to their lowest point in the last several years. For about an hour. Then the market swung back around and rates shot up, and all of a sudden we were higher than we’d…

Read More

May You Live in Interesting Times!

It was the Martin Luther King holiday Monday and the markets and banks were closed. My company was also closed for the observance, but I had some work to catch up so I put in a half day. As I said the markets were closed, so I didn’t obsessively check the mortgage bond market as I often do. The day played out quietly. An uneventful day. Maybe it was the calm before the storm. Later that night I heard that there was turmoil in the foreign markets. The stock markets throughout Europe and Asia were selling off in a reaction to the problems here in the US of A. Maybe the catalyst was Bernanke’s acknowledgement that we were in danger of a recession, or maybe it was a reaction to President Bush’s stimulus package. Whatever it was it was trouble. We live in a global economy now. What happens in…

Read More

Illinois Mortgage Rates Week in Review

Today’s Illinois Mortgage Rates and News week in review is my take on the week’s financial news and how it affected Illinois mortgage rates. There has been a see-saw battle over the last weeks and months as to what our bigger economic problem is – inflation or recession. Over the last few weeks with the release of a weaker than expected jobs report and comments by Fed Chairman Ben Bernanke, recession was gaining a decided edge. This week is notable because it is now in the open. All the powers that be are using the R word. We are either in one, or about to enter one. Inflation is still out there, but it’s on the back burner, a problem for another day. Most of the news coming out this week confirmed the trend. Retail sales for December were released and instead of the small gain that was expected, sales…

Read More

When Does it Make Sense, and How Much Does It Cost to Refinance Your Mortgage?

Mortgage interest rates are ticking down and refinancing is suddenly hot again. Make that Scorching Hot! A few years back when mortgage rates first dropped into the 5s, mortgage refinancing was the hot topic anywhere people gathered. It might not seem like the most scintillating party conversation, but this was a prime conversation as people vied for bragging rights on who was able to get the lowest interest rate. (Or maybe I just went to the wrong kind of parties.) Mortgage rates are back in the mid 5s again, and this time there isn’t the same level of excitement in the air. But it is a great time to take advantage of the low rates, improve your financial situation and put some extra money in your pocket Why should you consider refinancing? You can lower your interest rate and payments.   You can shorten your loan term and pay your…

Read More

Illinois Mortgage Rate Week in Review

It’s Friday, and time once again for the Illinois Mortgage Rates and News week in review, my take on the week’s financial news and how it affected Illinois mortgage rates. This week continued the knock down, drag out fight in the mortgage market between the forces of inflation and the forces of recession. The Fed has nervously watched to see which side would gain an advantage. Wall Street has called for bold, moves and massive interest rate cuts to prop the economy up and keep it from falling deeper in recession. The danger there is that cuts too big and too quickly could fuel inflation. With oil and food prices already high, this has been a problem. But this week it appears that recession has scored a knockdown, inflation might not be on the ropes, but it’s now acknowledged that recession is the bigger problem – for now. That means…

Read More

Why Advertised Mortgage Rates are “Never Right” – Shopping for the Best Chicago Area Mortgage Rates

Chicago,IL – Dave Weiss of Serious Real Estate – Chicago Real Estate Marketing and Sales had an interesting post on Why Advertised Mortgage Rates are Never Right. This is one of the dirty truths in the mortgage business. Mortgage ads are everywhere, on the Internet, spamming your email, in newspapers, billboards, radio – everywhere. These ads either show an unbelievably low interest rate, or they claim that they will get you the best mortgage rates. Like Dave said, they are almost always wrong. Mortgage rates quoted in newspapers and news articles are just as likely to be wrong. Why is this? There are several reasons: When mortgage rates are given in news articles they are usually linked to some kind of national survey of what lenders are charging, like the Freddie Mac weekly mortgage rate survey. Here the problem is a matter of comparing apples to oranges. The survey tries…

Read More

Illinois Mortgage Rates Weekly Update

It’s time again for the Illinois Mortgage Rates and News week in review, my take on the week’s financial news and how it affected Illinois mortgage rates. Over the last month or two we’ve been in a see-sawing, back and forth, up and down market with mortgage interest rates trying to find direction. Mortgage rates go up or down based on movement in the mortgage backed securities market. Mortgage bonds improve when there are signs of economic weakness, and they get worse when there are signs that the economy is growing and there is a threat of inflation. Over the last few months we’ve changed directions every few days as the market reacted to the latest economic news, up for a few days, down for a few days, the trend going back and forth. Now, with the start of the New Year, I think a major trend has been established,…

Read More

Presidential Primary Season is Now in Swing – How Will it Affect the Real Estate Market?

Tonight is the night of the Iowa caucuses, the first event of this Presidential election year. It Looks like Obama is the winner on the Democratic side, and Huckabee for the Republicans. Up until now the primary election has been in the background, white noise for all but the true political junkies. That changes tonight. Starting tomorrow, the news will be filled with results and conjecture, pundits telling us what has happened, why it happened and how this will all play out over the next eleven months. As time goes on more people will start paying attention, and within the next month or so we will know who the nominees are from both parties. Right now all the candidates are talking about health care, immigration, the war in Iraq and other issues. Little is being said about the state of the economy, and the housing slump. But one of the…

Read More