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 and injected oodles of cash into the system and there are signs of improvement.

At the beginning of the week the Secretary Paulson and Treasury Department reversed course and changed their plan from the original idea of buying up the toxic mortgages and bad assets of the banks, to buying a direct ownership in the banks. This idea was originally off the table for philosophical reasons, but market response has a way of changing minds. The government met with the nine largest banks and injected cash in exchange for an ownership position. More money will be put into smaller institutions over the coming weeks. This was an unprecedented move, but it looks like it is starting to have an effect. The credit markets are still stressed, but there are signs that they are starting to function again. The Ted spread (3month Libor – 3 month treasuries), a ratio of credit stress, is starting to fall, though it is still historically high. Confidence is still shaky, but returning, and with the government poised to add liquidity as needed, we should see more improvement in the coming weeks.

The reports this week all point to a still slowing economy. Consumer confidence dove off the cliff this month, coming in at 57.5, a drop from 70.3 in September and the biggest drop since they started the index back in 1978. Home starts are way down for the year and at the lowest level since 1981. In the long run this will be good news. The biggest problem in the real estate market is excess inventory, and with little new construction coming on the market, the supply and demand will equalize sooner. Industrial production declined again and retail sales slid by 1.2%, double the forecast. The CPI and PPI Inflation numbers came in flat, and with oil and commodity prices plummeting the outlook for inflation is one of the few bright signs.

Warren Buffet is now in the market buying American stocks. His motto is, Be fearful when others are greedy, and be greedy when others are fearful. He could be moving in too early, but with all the gloom in the air the chances are good that we have seen the worst of the decline in the stock markets. Buffet’s record speaks for itself. I think we could be in the same situation in the Chicago area real estate market. I don’t know that we are at the bottom, but I do know that there are some real bargains out there. I wrote about this earlier this week – Is this the right time to buy?

A lot of the volatility in the stock and bond markets is due to de-leveraging. This week investors and hedge funds who had borrowed heavily were selling everything, the good, the bad and the ugly, to raise cash and pay down debt. We saw that on the mortgage bond market as bonds plunged through resistance at the beginning of the week and hit the highest rates of the year. This in spite of all the signs that should be pointing to lower rates. By the end of the week bonds were coming back strong. Rates were up in the high 6s in the middle of the week, before bouncing off the bottom and ending the week at their best point. I think we will see lower rates this week. My advice to new mortgage applicants is to not lock into the rate now. As part of my job I monitor the markets closely and can help you time the market and let you know when the odds are best for locking your rate. The volatility is amazing, but having patience in a market like this can save you a lot of money.

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                                                                        Photo courtesy of The Truth About

The Truth About

30 year fixed rate      6.255%      6.374% APR

15 year fixed rate      6.00%      6.137% APR

5-1 A.R.M.                 5.50%     5.649% APR (1 year pre-payment penalty)

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%    6.286% APR

FHA LOANS - 3% down payment

With 1 point origination fee – 60 day lock

30 year fixed rate     6.125%    6.742% APR

With no origination fee – 60 day lock

30 year fixed rate     6.375%    6.754% 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.

Expect the volatility to continue this 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