Welcome to Illinois Mortgage Rates and News week in review for the week ending September 26th, my take on the week’s financial news and how it affected Illinois mortgage rates.

This week the markets were in limbo as everyone waited for congress to approve some version of the financial bailout bill. The original Paulson proposal has been changed around so there is now more transparency and accountability. At several times over the week it looked like an agreement was about to come together, but politics came in the way as neither party wanted to take the blame for what is sure to be an unpopular program. Even as groups of economists said that this isn’t the right way to handle the crisis, the risk of not doing something quickly was judged as a bigger risk. The markets were fairly calm, but the expectation is that an agreement will be in place over the weekend, before the Asian financial markets open Sunday night.

Some sort of bill is likely to be passed, but the question is, will it be enough? Our entire financial system has been on life support for most of the past year. Ever since the bubble popped in the mortgage backed securities market, the financial markets has been close to frozen. When the system is working, banks lend money to each other and money flows smoothly. This is all based on confidence that whatever money is lent out will be repaid as agreed. Now, with so much toxic debt in the system, the banks are afraid to lend to each other. This is a crisis of confidence that has worked its way from Wall Street down to Main Street, and the fear is that if this isn’t resolved soon, it will cut off credit to businesses of all sizes forcing us into a recession. The idea behind the bailout bill is that using up to $700 billion of tax payer money to buy up the bad debt, it will recapitalize the banks and the banks will then start to lend freely again.

But we could be in a recession already, or at best, the economy is slowing down sharply. Washington Mutual, one of the biggest banks in the country went belly up this week, the GDP for last quarter was down graded sharply. Jobless claims were up and home sales and durable goods orders were down. All of these things would have been huge news in a normal week, but were just side notes this week. With the economy slowing, will this bailout be enough to get the economy back on track? If the banks and investors are still nervous, what is to stop them from holding on to the money they get instead of lending it out freely? Odds are that we are still in for some economic contraction. What does the government have left to offer if this doesn’t work?

I’m not sure where we go from here, but I do see some trends which will have a big impact on mortgages, mortgage rates and the national real estate market as time goes on.

More regulation – Deregulation has been the trend for the most of the last 25 years, not just in the financial markets but in most industries. We are about to see a return to more regulation and government monitoring of any financial transaction.

The big will get bigger – We’ve been seeing consolidation in the financial industry for quite some time. Now the strong institutions, with government backing, are using the distress in the markets to buy up competitors on the cheap. Bank of America and Morgan Stanley Chase have been big beneficiaries of this trend, and it looks like Citi Group is going to buy Wachovia, another lender on the ropes. With less players, will this reduce competition and increase costs for consumers? Probably.

More direct Government control – Through FHA and the takeover of Fannie Mae and Freddie Mac, the government is now the 32,000 pound gorilla in the mortgage market. Over the last year as the market for conventional loans got squeezed with tougher and tougher guidelines for who could qualify for a mortgage, FHA took up a big part of the slack. Now that Fannie and Freddie are direct government charges, their mission will change from making a profit, to making more loans and helping to get the real estate market moving again.

Mortgage rates this week traded in a very narrow range all week as traders sat on the sidelines waiting for a deal to get done.

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 6.00%      6.136% APR

15 year fixed rate 5.75%      5.819% APR

5-1 A.R.M.            5.875%     6.176% APR

For Jumbo loans over $417,000

30 year fixed rate *6.50%     6.615% APR Special pricing requires 25% down payment or equity

7-1 A.R.M.             6.125%    6.344% APR

FHA LOANS - 3% down payment

With 1 point origination fee – 60 day lock

30 year fixed rate 5.875%    6.524% APR

With no origination fee – 60 day lock

30 year fixed rate 6.00%    6.486% APR

FHA APR reflects 3% down payment and the effect of mortgage insurance on the loan.

These are just a few of the mortgage 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.

With the fate of the bailout and the reaction of the markets, this should be another eventful week.

Illinois Home Mortgage Rates and News

Free Mortgage Quote:

Get Best Advice from illinois mortgage broker

Contact Your illinois mortgage company Today

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Are you Looking for first time home buyers loan ? Find Free Tips and Advice here

How to update yourself with Current chicago mortgage rates ? The Answer is here.

Looking for mortgage chicago il

Chicago FHA loans

We Offers illinois home mortgage Loans with best mortgage rates