Welcome to Illinois Mortgage Rates and News week in review for the week ending August 22nd, my take on the week’s financial news and how it affected Illinois mortgage rates.
This was another week in the mortgage bond market with huge volatility on a day to day basis, but an amazingly stable market when y
ou squint your eyes and look just at the week end results. In other words, mortgage bonds went up and down like crazy , but mortgage interest rates ended the week just about where they started. This is the end of August doldrums, and there wasn’t a lot of market changing news released this week. Still, there were a couple of events that make me think that the market focus is starting to change.
The PPI (Producer Price Index) a measure of inflation, jumped 1.2% in July, the largest increase in 27 years.
Inflation hawk and Dallas Fed Chairman Richard Fisher warned in a speech that though the economy was slowing, the up-tick in inflation could lead to a “lingering inflationary feverâ€.
Over the last couple of months either of those items would have been enough to spark a huge sell-off in mortgage bonds. That didn’t happen this time. There was plenty of news showing the economy is still slowing, but the inflation fear would have trumped the other news. Mortgage bonds actually broke through and ended the week above a stubborn level of resistance. Some of the inflation is obviously seen through the rear view mirror, but in the past it hasn’t mattered. Bond traders have been wearing their inflation blinders and they would take any excuse to sell. The fact that the market took this news in without flinching makes me think we are likely to see better rates in the near future.
The big news this week (or really lack of news, but focus of rumors) was the condition of the big dogs in the mortgage arena, Fannie Mae and Freddie Mac. Their stocks sold off again this week as rumors of their impending demise continued. The Treasury has already announced that they will stand behind Fannie and Freddie, and a bail out has been worked into all the market equations. But knowing it is coming while not knowing when or how (or who wins and who loses) has kept the organizations in limbo. Fannie and Freddie are the biggest buyers of mortgage loans, so getting them out of limbo and in a position to buy will help stabilize the housing market. Letting it go on as it is now, with everyone knowing something is coming but waiting to see how it all pans out, makes for more fear and insecurity, which puts more pressure on Fannie and Freddie, keeping a negative loop going. I’m guessing that this will all come to a head soon, and the bailout will become official.
Here is what Illinois Home 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 illinois mortgage company 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 6.375% 6.524% APR
15 year fixed rate 5.875% 6.014% APR
5-1 A.R.M. 5.75% 5.867% APR
7-1 A.R.M. 5.875% 5.989% APR
For Jumbo loans over $417,000
30 year fixed rate* 6.875% 6.634% APR
7-1 A.R.M. * 6.00% 6.173% APR *there is a 1 year pre-payment penalty on this option.
FHA LOANS - 3% down payment
With 1 point origination fee – 60 day lock
30 year fixed rate 6.25% 6.713% APR
With no origination fee – 60 day lock
30 year fixed rate 6.50% 6.852% APR
FHA APR reflects 3% down payment and the effect of mortgage insurance on the loan.
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 Home Mortgage Rates and News
Tags: Fed, mortgage backed securities, Mortgage markets, mortgage rate weekly update
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This entry was posted on Sunday, August 24th, 2008 at 10:19 am
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