Illinois Mortgage Rates and News

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 been at the start of the week before the Fed cut the rates. This volatility overloaded the system. Wholesale lender’s web-sites crashed as they tried to handle the flood of locks coming in. On a personal level, I can tell you that this was more excitement than I am used to. When you think of exciting jobs, mortgage banker is probably not one of the ones that first to come to mind. This week it was.

Besides the big rate cut, the major news was the proposed economic stimulus plan. In a rare show of bipartisan support, congress came together with President Bush to offer a $150 billion worth of rebates to tax payers and small businesses, with the hope that shoving enough money into the economy will give the economy a jolt and keep us out of a recession. The proposed plan offers tax rebates of $600 to individuals and $1,200 for couples, with additional rebates for families with children. There are extra credits for businesses who buy equipment, and some special incentives to help the real estate market. The proposal would allow a temporary increase in the conventional lending limit from $417,000 for a single family home now, to 125% of the median home price up to $725,000. It will also increase the FHA lending limit. Though the plan has moved out of the House of Representatives, it still needs to be passed by the Senate, and the President needs to sign it before it becomes law. So it might be a while before you get your check, or are ready to apply for a an extra large conventional mortgage.

I hope the stimulus plan works, and I hope that it brings the real estate market roaring back. But my suspicion is that this is more of a political move than anything. A big part of the problem in our economy is the lack of savings. This doesn’t address that, and throwing money out randomly doesn’t mean people will spend it, or use it in a way that will spur the economy forward. That said, I will be more than happy to cash my check.

So how did all this news affect the markets? Rates this week are slightly higher than they were at the end of last week. Still, refinancing activity picked up a lot. If you weren’t able to lock in when the rates were near their lows, I encourage you to get your paperwork in to your friendly neighborhood loan officer, and be ready. We may have another shot at this over the next few weeks, and you are in a much better position if your paperwork is in and you are ready to go. All this activity should also bring out more home buyers.

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    5.625%    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.               5.25%      5.395% APR

For Jumbo loans over $417,000

30 year fixed rate    6.25%       6.375% APR

7-1 A.R.M.               5.75%       5.893% 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 is packed with big economic news. The Fed meets on Wednesday where it is expected that they will cut short-term rates another half a point. Durable goods orders, new home sales and GDP numbers will all be released next week, as well as the biggest market mover, the employment report which will be released next Friday. With all this activity, expect more volatility.

Illinois Mortgage Rates and News.