Illinois Mortgage Rates Week in Review
19th January 2008
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 job
s 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 were down. Housing starts fell to the lowest level since 1991. With new construction off so much, this is bad news for everyone in the construction industry, but it is good in the long run. In order for the housing market to improve we need to get rid of the excess inventory. That is hard to do when builders are putting more homes on the market.
Merrill Lynch wrote down another 10 billion in bad mortgage debt, their second major write down. The big question is how much more bad debt is still out there. As the big banks write off all their bad debts, they’ve needed to take on new capital. For the source of this new money they’ve turned to foreign investors, mostly China and Arab oil interests. Immigration is already a big issue in this years presidential campaign. I expect the sale interest in our big banks will be soon. The other big news this week was how everyone is suddenly if favor of an economic stimulus package. Bernanke came out in favor of the idea. President Bush has a plan and the Congress has their own. Whether it’s more tax breaks for businesses, or money in the mail for tax payers, more money will be pumped into the economy soon.
So how did all this news affect the markets? The stock market continued to get hammered, and mortgage bonds improved with mortgage interest rates continuing to fall. Conventional mortgage rates are now at their lowest point in the last several years. We are seeing a lot of refinancing now. Refinancing your mortgage makes sense for anyone who has bought a home in the last few years, as well as for those with adjustable rate mortgages that are about to adjust and home owners who have debt to consolidate. The low rates are bringing out more buyers, too. Even with all the doom and gloom there are a lot of good reasons to buy a home in the Chicago area now.
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 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. 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 5.50% 5.624% APR
15 year fixed rate 5.00% 5.136% APR
5-1 A.R.M. 5.125% 5.285% APR
7-1 A.R.M. 5.125% 5.285% 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 5.375% 5.647% 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.
There won’t be a lot of reports issued next week, so the focus will be on the Fed meeting to be held January 30th, where they are now expected to lower the discount and Fed Funds rates by a half a point.
Illinois Mortgage Rates and News.
Peter Thompson is illinois Mortgage Broker
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