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

I hope everyone is having a great holiday season. This has been a short week for many people, including the traders on the mortgage backed securities markets. With a thinly traded market, and wholesale lenders filled to capacity with loans, mortgage rates ticked slightly higher this week. Still, we are near the best rates in the last several years. There will be a lot of people who benefit from the low rates we are seeing now, even if the rates don’t move any lower. With rates this low, this could be one of the biggest refi booms ever, but there are some changes this time which make this very different from previous refinance waves.

1. Not all borrowers will qualify – In previous refinance booms nearly everyone who owned a home and had decent credit would benefit from a refinance. This time it is going to be more selective.

• Your credit will need to be excellent in order to qualify for a conventional loan.
• You will need to be able to prove your income and qualify for the payment.
• And probably the biggest consideration now is that the property will need to appraise out high enough to support the new mortgage.

(These restrictions don’t apply for borrowers who have FHA loans and want to take advantage of the FHA streamlined refinance, which doesn’t verify or state income, is not based on your credit score and may not require an appraisal. The main requirements for this loan are that you are up to date on the payment of your FHA mortgage and that you will benefit with a lower payment.)

2. Not all loans will benefit –If you currently own a home financed by a Jumbo mortgage (over $417,000 for a single family home), you are probably wondering what all the fuss is about. Conventional mortgage rates were in the mid sixes a few months back and are in the low fives now. In this same time period, Jumbo loans have hardly moved. The difference is that the Fed has made a commitment to buy mortgage backed securities backed by conventional mortgages (which are also now backed by the federal government). Jumbo loans are backed only by the bank which issues the mortgage and investor interest in these loans is slight, so there is a huge spread between the going rate for conventional loans and Jumbos. Some people are paying down their jumbo loans in order to get under the conventional threshold. With low returns in most investments, this may be a good way to get a guaranteed return.

3. No cost refinances are getting harder to do – No-closing cost refinances have been a great benefit to consumers and one of the most popular ways to refinance a mortgage. Lenders have traditionally offered a variety of pricing options for their mortgages. We, as mortgage brokers and mortgage bankers, get rate sheets from the lender with price matrixes that offer a variety of ways to price the loan. The wholesale lenders pay us for bringing them loans, so we can price it to the consumer in three ways  –

• You can pay the normal title and closing costs and get a mortgage at the market rate with no points.
• You can pay points (1% of the loan amount for each point) to buy down the rate. The more you pay up-front, the lower your rate will be. … Or..
• You can go the other way and with a slightly higher rate, take on a loan with no closing costs at all.

With the no-cost refinance your mortgage broker or banker is using extra premium from the lender to pay for all the closing costs. If you have a larger mortgage, a no cost loan was usually just slightly higher than a loan with full closing costs. This was a great deal for home owners as they could lower their rate and payment with little up-front cost, and refinance again if rates dipped lower down the road. It was also a great deal for mortgage brokers and mortgage bankers who would refinance the same clients several times in the course of a year if rates continued to fall. It wasn’t nearly as good a deal for the wholesale lenders who paid extra money for a loan that quickly disappeared from their servicing portfolio. It looks like lenders are going to be more cautious this time. The spread between higher rates and the lowest rate loans has narrowed, and in some cases disappeared. No-cost refinances are still possible with the largest conventional loans, but many borrowers will need to expect to pay closing costs to get their loan. If mortgage rates drop again, they will need to pay the closing costs again, making it prohibitive to refinance unless the payment is much lower.  

Because of these factors, refinancing will be different this time. But if you do qualify, it can mean a huge difference in your payments and a real stimulus to your wallet.

Here is what Illinois Home mortgage rates look like today for an A+ (740 Fico or above), 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      5.25%      5.356% APR

15 Year fixed Rate     4.875%    5.046% APR

5-1 A.R.M.                 5.125%    5.322% APR

For Jumbo loans over $417,000

30 year fixed rate  * 6.75%      6.827% APR *

Special pricing requires 20% down payment or equity –

7-1 A.R.M.                 5.375%       5.598% APR

FHA LOANS - 3% down payment

With 1 point origination fee – 60 day lock

30 year fixed rate      5.00%      5.784% APR

With no origination fee – 60 day lock

30 year fixed rate      5.50%      5.739% 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.

This coming week will also be a short week, so expect more volatility in mortgage rates.

Illinois Home Mortgage Rates and News             First time home buyer loans

                               Do you Twitter? For daily mortgage updates, follow me at @PTmortgage

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