Welcome to Illinois Mortgage Rates and News week in review for the week ending May 22nd, 2009, my take on the week’s financial news and how it affected Illinois mortgage rates.

Mortgage rate volatility has returned with a vengeance. For the last several months mortgage rates have moved up and down in a range so even it has become predictable. Mortgage rates have gone up and down in this range (sometimes in the same day), and every move has been accompanied by some news which was credited with moving the market in that direction. But over this time the Fed has been a stabilizing influence. They’ve committed $1.25 trillion to buy mortgage backed securities to keep rates low, and so far their plan has worked flawlessly. But this week new fears are in the market and the worry is that it is going to be different this time. Mortgage bonds were near the best part of their rang on Wednesday after the minutes of the last Fed Open Market Committee were released and showed that the Fed has discussed extending their mortgage buying program if necessary, and renewing their goal of keeping rates low. But the best rates didn’t last long. On Thursday the mood of the markets shifted and both Treasuries and mortgage backed securities got blasted, sending mortgage rates higher (though mortgage bond yields are near the high end of the range, mortgage rates haven’t gotten hit nearly as bad). So the question now is, is this just more noise and we are still in the same range, or is it different this time, and rates are now poised to rise?

The big fear in the markets now is that the government has borrowed so much that we are at the risk of insolvency. Great Britain was warned on Thursday that their recent run up in debt put them at risk of a cut in their AAA credit rating. If Britain is in trouble, how can we be in any better shape? Since this whole economic meltdown started, the US has kicked both its spending and borrowing up into the stratosphere. The dollar got decimated on the world market and Treasury bills got whacked again. Everything is based on faith. If global investors lose faith in the long term strength of the United States, we are all in a world of hurt. The Fed is sure to step in with a new batch of buying, but what if it doesn’t matter? This is possible, but two things make me think this is a little premature and the fear will die down soon. For one thing, this happened right before a long weekend, and with many traders taking extended weekends, trading was light. Volatility increases with light trading volume, so we could go right back to where we were after the weekend is over and everyone gets back to work. The other reason this may be just another blip on the screen is that we as a country may be in bad shape, but so is everyone else. If they don’t invest in the United States, where will they put their money? The truth is, there are no other real options. We’ll know more later this week. Another round of Treasury auctions are scheduled for this week, adding more debt. Expect the Fed to do something before the auctions to show that they still own the mortgage market.

The big news last week was the announcement that the first time home buyer tax credit would be monetized and available for use as down payments on FHA loans. At the time, HUD Secretary Shaun Donovan said details would be released the following week (this week). The week is over and there is still nothing concrete. As I said at the time, this will take a while before we actually see this put in place and it looks like they got ahead of themselves by announcing this now before the plan was ready. Details will have to be worked out on how this program can work with FHA guidelines, how the lenders will incorporate it into their underwriting and closing processes and who will actually make the loans (based on the tax refunds) and how these loans will be secured. There is a lot to be done before this program is rolled out, but I expect this will be a major factor in the market once it is in place. We don’t have news yet, but the bets are that this program will be going forward and is likely to help a lot more first time home buyers buy homes now.

Mortgage rates moved around a lot, but ended about the same as where they ended last week. Here is what Illinois Home mortgage rates look like today for an A+ (740 Fico or above), full doc single family home purchase or rate/term refinance on a 45 day rate lock, with 0 points, and no origination fee. The conventional and FHA rates 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              4.875%     5.069% APR

15 Year fixed Rate             4.50%      4.663% APR

5-1 A.R.M.                         4.25%        4.386% APR

For Jumbo loans over $417,000

30 Year Fixed Rate*          5.875%       6.057%

*Best rates are based on 70% LTV, 760 and above FICO single family homes.

7-1 A.R.M.                        5.375%       5.453% APR

(For smaller Jumbo loans another option is to break your loan into 2 parts – conventional to the limit and a HELOC or second mortgage for the rest.)

FHA LOANS – 3.5% down payment – FHA Maximum varies by County

With 1 point origination fee – 45 day lock

30 year fixed rate              4.75%      5.339% APR

With no origination fee – 45 day lock

30 year fixed rate              5.00%      5.523% APR

FHA APR reflects 3.5% down payment and the effect of mortgage insurance on the loan. Call for information on no-cost FHA streamlined Refinances

VA Veterans Administration 0 Down Loans

With 1 point origination fee – 45 day lock

30 Year Fixed Rate            5.00%      5.478%  

Call for information on no-cost VA Streamlined Refinances

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.

Enjoy your memorial day and have a great long weekend.

Illinois Mortgage Rates                   First time home buyer loans  

We Lend in All 50 States

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