November 2008

Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending November 28th, my take on the week’s financial news and how it affected Illinois mortgage rates. I hope you all had a great Thanksgiving and have given some thought to what you are thankful for. In the mortgage market this week we have one more reason to be Thankful. Mortgage rates dropped this week, by a lot. Over the last month mortgage rates have been flat, and in a holding pattern. The news over the last few months has been consistently grim. The economy is slowing dramatically and the threat of inflation is just a hazy memory from this past Summer. Deflation is the watchword now. The Fed has taken short term rates all the way down to 1% in an effort to get banks to lend money. The government has been trying to get mortgage…

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Mortgage Rates Down – New Fed Program Means Opportunity for Refinancing and Home Buyers

Over the last month, mortgage rates have been stuck in a narrow range. All the news coming out about the economy was consistently bad, which is usually good news for lower mortgage rates, but the bond market was stuck and rates didn’t budge. A big part of the problem has been lack of investor confidence,  even though Fannie Mae and Freddie Mac are now fully backed by the government. Over the last months since the credit crisis hit, the Fed and the Treasury have been trying to get mortgage rates down. In order for the economy to recover, housing has to recover and lower rates are a big part of the solution. But even as the Fed lowered short term rates all the way down to 1%, the mortgage market wouldn’t bite and the spread between mortgages and short term rates hit an all time high. The good news is…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending November 21st, my take on the week’s financial news and how it affected Illinois mortgage rates. The markets are still in turmoil and fear is still the ruling emotion. The two big stories on the financial markets this week were the anticipated bailout of the big 3 automakers, and the news that mega-bank Citigroup is now on the ropes. The auto makers have been on a downward slide for years, and their collective decisions to base their fortunes on SUVs took a hit when gas prices soared. They have made a lot of bad decisions over the years, but it wasn’t the gas prices that pushed them over the edge, it was the credit crunch. Car buyers have disappeared, and those who are in the market are having a harder time coming up with financing. With…

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Financing Foreclosure and Short Sale Properties – Part 1

A big part of the real estate market right now is made up of foreclosures and short sales. Foreclosures are bank owned properties, homes that are owned by the lender because the home owner couldn’t make their mortgage payments. Short sales are pre-foreclosure properties where the home owners owe the bank more than the value of their home. Foreclosures in the Chicago area used to be a tiny percentage of the homes sold. But over the last few years with the down turn in the housing market and the economy, the percentage has grown and this year foreclosures have exploded. It is a sad sign of the times that these homes are the most active part of the market. It is a real tragedy when a family loses their home (though a good percentage of the foreclosures are investments and speculations gone bad). It is also bad news for the…

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New FHA and Conventional Maximum Loan Limits for Chicago and the Surrounding Area

In the mortgage business, there is always anticipation around this time of year as we wait for the new loan limits to be announced. I know, as far as excitement goes this is up there with waiting for the new phone book to come out. But this year the drama was a little more pronounced. The conventional loan limits (the maximum loan that will be insured by Fannie Mae and Freddie Mac,) have stayed the same for the last several years, and with home prices soft the betting was that they would stay the same again this year. And the betting on that count was right. The maximum loan for a single family home here in the Chicago area and throughout most of the country stayed the same at $417,000. In high cost areas (Hawaii and parts of California, mostly) the max loan limit actually went down. Earlier this year…

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VA Loans – 100% Financing For Qualified Veterans and Active Duty Military

Happy Veterans Day, and I’d like to thank all the veterans and active duty military for their service to our country. As a veteran or active duty military, one of your best benefits is the VA (Veterans Administration) loan. This is the original, and last surviving 100% loan. Since the end of World War II, VA loans have allowed qualified veterans to get a piece of the American Dream and buy a home of their own with out a down payment and with easier qualifying standards than with conventional mortgages. This loan is now more important than it has been in years. As more and more veterans separate from the service after action in Iraq and Afghanistan, this will be a great way to take advantage of the lower home prices and buy a home at terms they can afford. Some of the features of the loan are: Can be…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending November 7th, my take on the week’s financial news and how it affected Illinois mortgage rates. The big news this week was the election. After what has seemed like an eternity it is finally over. Now we have a break from negative ads for about a year before the congressional races start again. But now with Obama as our new President Elect, there is a little less uncertainty out there and we at least know who our leader is going to be going forward. This has already helped stabilize the markets. The waiting game is now focused on who he will pick for Secretary of the Treasury and what he plans to do about the economy. He has already said that the first priority is to put together a new stimulus plan. The first stimulus plan…

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How Will an Obama Presidency Affect the Mortgage and Real Estate Markets?

The Chicago area has been in the spotlight this week with the election of Barack Obama as our next president of the United States. As a Chicago area resident I’ve had a first hand look at Obama before he was on the national radar, and I’ve followed him closely as he reached national prominence. In my own little brush with greatness, I had the chance to talk with him for a few minutes 4 years ago when he was first running for the senate. He came off as smart, approachable and down to earth guy with an easy sense of humor – a scaled down version of how he is in front of the huge crowds. I’m proud to have him as our president and I have hopes for what he can do for our country in the future. One of the questions I’ve been asked a lot over the…

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Illinois Mortgage rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending October 31st, my take on the week’s financial news and how it affected Illinois mortgage rates. I hope you’ve all had a Happy Halloween. Last year I bought what I was sure was going to be plenty of candy for the trick-or-treaters, but around 7:00, after a  big pack of kids came by, we were nearly out of supplies. My goal is always to get through the night without too much leftover candy. I try not to have too many sweets around as we can all do better without them, but I hated the idea of being one of those guys who didn’t have candy when kids came by. I ended up racing out to the store for reinforcements. And, of course, we didn’t have another visit the rest of the night. This Halloween I decided…

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