Illinois Mortgage Rates and News

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 more rate cuts ahead.

There weren’t a lot of economic reports released this week. The big news was in a speech by Fed Chairman Bernanke, where he tipped his hand that he was prepared to take "substantive action" to keep the economy on track. The weak jobs report released last week was the factor here. Bernanke’s statement was interpreted by the financial markets as an expectation that the Fed will cut rates by a half point this month, with more cuts to come.

The other major news this week was the sale of Countrywide Financial to Bank of America. Countrywide, the nation’s largest mortgage lender, has been on the rocks since last summer when the sub prime mortgage market melted down. They were a leader in both sub prime and Alt-A lending, and when the market for these loans disappeared, they were suddenly in a whole mess of trouble. They had to get huge infusions of cash several times over the last months - including 2 billion from Bank of America - just to stay in business. This week rumors were flying about Countrywide being on the verge of declaring bankruptcy. Bank of America stepped in late in the week with an offer, and the deal came together this morning.

The mortgage bond market fluctuated over the week as money shifted back and forth between stocks and bonds. Even with the lack of news, the market was volatile and it looked like it was changing direction several times. At the end of the week more money flowed into bonds, and rates on some loans fell to a low for the week, matching their lowest point in the last two years. 

Here is what Illinois mortgage rates look like today for an A+, full doc purchase on a 30 day rate lock with 0 points, and no origination fee.  The conventional loans are based on the highest 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. 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, give me a call or contact me and I’ll take the time to find the rate and program that is best for you.):

Conventional loans up to $417,000

30 year fixed rate    5.625%    5.734% APR

15 year fixed rate    5.125%    5.237% APR

5-1 A.R.M.               5.25%      5.395% APR       

7-1 A.R.M.               5.50%       5.627% APR

For Jumbo loans over $417,000

30 year fixed rate    6.25%       6.375% APR

7-1 A.R.M.               5.625%     5.773% APR

FHA LOANS up to $270,200 with 1 point origination fee

30 year fixed rate    5.50%    5.823% APR

These are just a sampling of the mortgage rates available. We have special programs for first time home buyers and all the bond programs including the City of Chicago Bond program and the State of Illinois Bond program which offer no down payment and below market pricing.

Next week a lot of economic news is coming out. The PPI and CPI, two measures of inflation in the economy, come out Tuesday and Wednesday. Retail sales and industrial production numbers will also be released.

Illinois Mortgage Rates and News.