Welcome to Illinois Mortgage Rates and News week in review for the week ending May 30th, my take on the week’s financial news and how it affected Illinois mortgage rates.

Over the last several months mortgage rates have gone up and down in a relatively narrow range. The dangers of inflation and recession have been pretty much equalized, and though there were extreme moves on a day to day basis, it seemed that by the end of the week the market was back close to where it started. That changed this week as mortgage bonds fell out of bed and out of this range sending mortgage rates higher. There were economic indicators cited as reasons behind the move, but these indicators aren’t saying that the economy is back on track, and they aren’t pointing to raging inflation either. The indicators are mixed, as they have been over the past months, showing our economy is still muddling along and inflation is a factor, but more of a future threat than a present menace. So it’s not that the economy has suddenly changed, it is the perception

Durable goods orders for April were down .5%, overall, but excluding transportation (cars and airplanes), the results were up 2.5%. First quarter GDP was revised slightly from .6% to .9% growth. Neither of these figures shows that the economy is booming, but they were enough to send the mortgage bond market in a dive. On Wednesday mortgage bonds broke through a technical barrier that had held fast over the last several months. Technical analysis charts price movements over time in order to pick up patterns that can help predict future movements. One of the tools used in technical analysis is moving averages, an average of the price movement over a set time, say 25 to 200 days. These moving averages and other measures set areas of resistance which act as ceilings and floors for stock and bond activity. When a mortgage bond is trading in a range, it is amazing how often it can be surging strongly in one direction until it hits a point of resistance and flips around and goes in the other direction. This has happened over and over in the past three months, so when the price breaks out of this range it is a big deal. Rates got clobbered Wednesday and Thursday, recovered some on Friday but the resistance point that served as a floor before, has now become a ceiling, and we may need to see some truly bad news on the economy before we break through this range again.

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, or to get pre-approved for a mortgage, 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    6.125%   6.274% APR

15 year fixed rate    5.75%     5.922% APR

5-1 A.R.M.               5.50%     5.678% APR      

7-1 A.R.M.               5.75%     5.899% APR

For Jumbo loans over $417,000

30 year fixed rate*   6.75%     6.877% APR – Requires 20% down payment

(*We have one lender at 6.25% for a Jumbo fixed rate – if you meet their guidelines – 75% loan to value, tighter ratios.)

7-1 A.R.M.*             6.00%     6.185% APR *there is a 1 year pre-payment penalty on this option.

FHA LOANS

With 1 point origination fee – 60 day lock

30 year fixed rate   6.00%     6.387% APR

With no origination fee –        60 day lock

30 year fixed rate   6.25%     6.388%

These are just a few of the programs and mortgage rates available. Which option is best for you depends on your own specific goals and needs. If you have any questions or want to go over your situation in depth, let me know how I can help.

Illinois Mortgage Rates and News

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