October 2008

What is Going On With Mortgage Rates?

If you’ve been following interest rates lately, you might have whiplash. Rates have gone up, then back down, then up again. And that’s all in the same day.  Over the last year mortgage rates have been more volatile than at any time in the nearly 17 years I’ve been following them. But in the last few weeks, since the credit crunch hit, the volatility has gone through the roof. Mortgage rates have tested their high point for the year, then swung around and dropped to the best rates we’ve seen in the last few months, before swinging back the other way and nearing the yearly highs again. What is going on with mortgage rates? In normal times, mortgage rates go up and down based on activity in the mortgage backed securities market, and the prices move based on how traders read the state of the economy and the possibility of…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending October 24th, my take on the week’s financial news and how it affected Illinois mortgage rates. At the end of last week and the beginning of this week, it was starting to look like the markets were chilling and the real panic was over. Maybe not. The world wide panic has shifted from worries about the credit crunch to worries about the severity of the global recession. One trader defined this market as periods of panic interrupted by moments of calm. It is not just people or investors panicking, but the banks themselves. The banks are still afraid to lend money, and with all the markets in downdraft, investors are having to sell whatever they have, good, bad or ugly, in order to raise cash (except for treasury bonds, money is rushing into the safety of…

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Questions? Frequently Asked Mortgage and Real Estate Questions Answered

One of the great things about blogging is that it sets up a conversation with my readers. I regularly get questions on what is happening in the mortgage market, both general mortgage and real estate questions, and things that are specific to their situations. But it seems that I do get a lot of questions that come up regularly. These questions relate to many situations, so this is the first in what will now be an occasional feature on frequently asked questions. I hope the answers will help you and your specific needs. Do I have to pay all collection accounts in order to get a loan approved? Maybe, but not always. This is up to the underwriter’s discretion. Part of it depends on how old the collection accounts are and how serious they are. You will automatically need to pay any debt that will be or could turn into…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending October 17th, my take on the week’s financial news and how it affected Illinois mortgage rates. I think we are starting to return to normal – if normal is a period where the markets -all the markets – swing wildly from high to low and back again, and then reverse themselves the next day. All this year volatility has been at an all time high, but since Lehman Brothers fell and the global credit system went into cardiac arrest, the volatility has gone into overdrive. But as crazy as the markets have been, the panic is receding and the credit market is taking baby steps back to a functioning level. There are still huge problems in the global debt and equity markets, but the governments, here in the US and all across Europe, have stepped in…

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First Time Home Buyers – Is it the Right Time to Buy a Home Now?

It is always a leap of faith to do something for the first time, and first time home buyers who are in the market to buy a home now need to take a bigger leap than normal. These are scary times in the real estate market. Home prices are down sharply from where they were last year, or even over the last several years. The credit crunch has morphed into a financial crisis and it looks like we are in a recession, and the recession may get worse before it gets better. Financing is tighter than it was before and you will need to have a down payment in order to get a mortgage. Being a first time home buyer is always scary but with fear in the air the safe thing to do is to sit on the sidelines. Or is it? There is no way to know when…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending October 11th, my take on the week’s financial news and how it affected Illinois mortgage rates. The view on the economy this week changed from fear and concern to outright panic. The markets, both here and globally were in free fall this week. Stocks, bonds, you name it, this week was a bloodbath. When the $700 trillion dollar economic bailout bill failed to gain the markets confidence and get the credit markets moving, Treasury secretary Paulson and Fed Chairman Bernanke pulled out some more tricks from their bag and did everything but drop money from the sky. The Fed doubled their auction capacity from $450 billion to $900 billion, opened their lending window to commercial paper and dropped the discount rate by .5% in conjunction with a consortium of global national banks. And none of it…

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Chicago Area Real Estate Tax Bills are Up – Property Tax Appeals Process

Cook County tax bills were sent out last week, and for a lot of homeowners the bills were a big surprise – and not in a good way. My phone has been ringing with home owners wondering how their taxes moved up so sharply. Home values have trended down over the last few years, but accessed values have moved up, in some cases by a lot. The problem is that properties are re-accessed every 3 years (each township rotates so they are not all done at the same time), and this year the re-assessment comes at a time when legislation has phased out some tax caps, so the result is a spike in tax bills while the value of their home is lower. The real estate tax system is complicated and there are a number of factors that go into calculating the tax bill. The first thing to do is…

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Financial Turmoil Doesn’t Scare Off Chicago First Time Home Buyers

As the news lately has been filled with doom and gloom about our economy, I’ve noticed a funny thing. First time home buyers are coming out of the woodwork. I’m getting more calls, emails and contracts from buyers who want to buy their first home than any time in the last six months. As home owners worry about how there homes are worth less, new buyers are looking at this as an opportunity to buy a home at fire sale prices. Buying now they can afford homes that were out of their price range just a year or two earlier. There is no doubt that fear is in the air. But in some ways that makes this the best time to buy, especially if you don’t have a home you need to sell first. The truth is that no one knows when the best time is to buy. The market…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending October 4th, my take on the week’s financial news and how it affected Illinois mortgage rates. The financial news this week all revolved around the fate of the financial bailout bill. The markets were thrown for a loop on Monday when the bill was rejected by the House of Representatives. The vote was expected to be close, but both parties claimed they had the votes locked in over the weekend. The stock market reacted by diving nearly 800 points after the deal fell through. The rest of the week the markets nervously treaded water waiting for some kind of plan to come together. The bill went from the 3 page Paulson proposal to a 110 page House bill, to a 400 plus page, pork sandwich which the Senate passed. The House followed through on Friday and…

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Pointing Fingers – Was it CRA and Minority Lending That Caused the Mortgage Mess?

I think it is safe to say that our economy is in a mess. The mortgage crisis and the panic in the stock market are now front page news. The credit crunch that has been festering over the last year has now come to a head and it looks likely that we are in for a deeper recession than many had hoped. When things go bad it is human nature to point fingers and try to access blame. Over the last few weeks I have gotten several emails and seen one video that claim the housing mess came about from too much government mandated lending to low income and minority home buyers. There is plenty of blame to go around, but Wall Street didn’t gorge itself on CRA (Community Reinvestment Act) and low income housing loans. These loans are low profit and banks do as little as they can to…

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