May 2008

Mortgage Qualification is About To Get Harder – Even More So Here in Illinois

Over the last year mortgage qualification has become increasingly harder. Two new changes go into affect next week which will ratchet loan approvals a little tighter still. One is a change that only affects mortgages here in Illinois. Senate Bill 1167 will become law as of June 1st. This law is aimed at predatory lending and the problems caused by sub-prime loans. It restricts the types of loans available, requires home buyers counseling for home buyers in Cook County who are taking out specific types of loans, and it requires more transparency so the consumer knows exactly what they are getting when they enter into any mortgage financing. There are some good features in this bill, but most of what they are legislating against has already gone away due to market forces in the mortgage market. Sub-prime loans have been a big problem and there is no question that they…

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How Will High Gas Prices Affect the Chicago Area Housing Market?

Oil prices are up to record highs. Last week the price went as high as $135 per barrel, and I’ve seen predictions that it will be $150 or even $200 per barrel by the end of the year. We’ve all seen how this spike in prices has affected gas prices at the pump. Yesterday I filled up at $4.20 per gallon, about $15 a tank higher than what I’ve gotten used to paying (which already seemed too high). Depending on how much you drive, this extra cost is taking a nice sized bite out of your disposable income. Add that to the effect of higher gas prices on the economy as a whole, everything that needs transportation (both goods and people) now costs more, as does anything which is made with oil (fertilizer, plastics and so on). This means that prices in general are going up. So the question of…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending May 23rd, my take on the week’s financial news and how it affected Illinois mortgage rates. The economy has been on a tightrope for quite some time, perched above the brink, on one side inflation the other economic stagnation. The Fed has been walking out on this tight rope, careful to not lean too far one way or the other. It’s been a difficult task and so far it looks like they are dipping on both sides, but still maintaining balance. The economy is slowing and inflation is heating up, but there are signs we are heading in the right direction. Right now the markets see inflation as the bigger threat. The Fed has signaled that they are through with rate cuts, at least for the foreseeable future, and that they are prepared to do whatever…

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Chicago Area Condos – More Units Coming on the Market

A recent article in the Chicago Tribune talked about the amount of new condo units coming on the market this year here in Chicago. According to the article 5,984 units are due to come on the market this year. Last year there were 4,794 new units, and next year they are projecting 4,160 units. Condo construction has been a big part of the city’s resurgence over the last years, and the new condo units help to revitalize neighborhoods. But with so many units coming onto an already glutted market, at the same time that condo financing is getting increasingly more stringent, we are sure to see some problems. Over the last few years we have seen a boom in new condos, both in Chicago and throughout the Chicago suburban area. Part of these were new construction condos, and a lot were conversions from apartment buildings to condo units. The condo…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending May 16th, my take on the week’s financial news and how it affected Illinois mortgage rates. If you follow the news, it was a grim week with talk of natural disasters in Asia, an earthquake in China and a cyclone in Myanmar. With true disasters like this the mess in the real estate and mortgage markets doesn’t look nearly so bad. In fact, there were a few signs this week that we are starting to come out of the worst of the mess. While it is too soon to say that we have reached a bottom, there are signs that point to how we can navigate through this. We are still a long ways from where we were, but in a way we are coming to a new normal, and I see signs of the financial…

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Chicago Area Real Estate – How do We Know When We’ve Reached the Bottom?

If you are in the market to buy a home or condo here in the Chicago area, you are probably a little bit nervous. On one hand, the property values are down and you are able to buy a home at a bargain price compared to where homes were selling just a year or two ago. On the other hand, you wonder if we are near the bottom, or if the bargain you buy now will seem over priced a year from now. The truth is that markets (whether stock markets, bond markets or real estate markets) are unpredictable, and we won’t know where the bottom was until we have gone past it. That being said, I’m not sure we are at the bottom yet, but it is still a good time to buy a home here in the Chicago area, as long as you plan to keep it more…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending May 9th, my take on the week’s financial news and how it affected Illinois mortgage rates. This week offered more confirmation that our economy is a mess. Oil prices hit a new record, $126 per barrel. Food and commodity prices are moving up sharply, too. At the same time in the real estate market few properties are selling, home prices are down and foreclosures are up. The economy is still shedding jobs, though at a slightly lower pace than before. Consumers are still piling on credit, but they are using more credit to buy gas and groceries. Not a good sign. We can see a lot of dark clouds on the horizon. So with all this bad news, is there a silver lining or, to mix metaphors, is the light at the end of the tunnel…

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Debt Consolidation Refinancing can Save You Hundreds Each Month and Help You Get Out of Debt – If You Do it Right

I read a lot about the economy and what the experts say about it, but I get the best feel for what is happening from talking with my clients. People need mortgage money whether the economy is up, or down, but they need it for different reasons. When the economy was flying high, a typical phone call would be about buying a new, bigger home, starting an addition to their current home or buying a vacation home. I’m still doing a fair amount of new purchases, but a lot of my calls now are about cash out refinances to consolidate debt. It always makes sense to make sure your mortgage is in line with your overall finances, but it is especially important when money is tight. A debt consolidation loan can help you to restructure your debt in a way that puts more money in your pocket and gives you…

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Illinois Mortgage Rates Weekly Update

  Welcome to Illinois Mortgage Rates and News week in review for the week ending May 2nd, my take on the week’s financial news and how it affected Illinois mortgage rates. There is one week every month where all the data hits at the same time, sending an overload of information to the financial markets. This was that week. As I’ve written before, mortgage interest rates go up and down based on activity in the mortgage bond market. Mortgage bond traders are the financial market’s version of tea readers or fortune tellers. Collectively, they take in all the data as it is released, make split second judgments on how the data will affect the value of their investments over the long term and buy or sell the bonds based on their predictions. And they do this throughout the day, each day. A lot of money is riding on each decision,…

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