June 2009

Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending June 26th, 2009, my take on the week’s financial news and how it affected Illinois mortgage rates. If you are a regular reader of this blog, you may have noticed that I’ve missed the last two market updates. I took a much needed vacation and for the first time in years was almost completely cut off from the news of the economy and world events. So the past week has been spent catching up, both at work and with the news of the day. In a way, not that much has changed since I left. The markets are still bouncing around and the economy is showing some rays of sun amid the gloom. The biggest change is with mortgage rates. When I left rates had risen to their highest point in the last six months as…

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Reading the Tea Leaves in the Latest Fed Announcement

The big event for those following mortgage interest rates and the factors which make them move, was the release of the Federal Open market Committee’s statement following the end of their two day meeting today. Any Fed meeting is always a big event, but this one loomed larger than most. Over the last month mortgage interest rates have jumped nearly a full point (before settling down some over the last week) and putting an end to the refinance boom that had been chugging along since last December. The higher mortgage rates haven’t been enough to derail the purchase market, which has been driven by first time home buyers and helped along with an $8,000 government rebate. But the fear has been that if rates get much higher the purchase market will crash and the housing market will take another direct hit. All the experts agree that in order for the…

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How to Use Seller Concessions to Pay For the Closing Costs When You Buy

It costs a lot of money to buy a home. For most first time home buyers, coming up with the down payment is the biggest challenge, and even the low 3.5% down payment that FHA requires can be a big hurdle to buying (Here are some ways to get together the down payment). But getting the money together for the down payment is only part of the problem. In addition to the down payment there are a lot of other costs you will need to come up with at the closing. Some of the items you will need to pay for include: Bank fees, including the appraisal and credit report, underwriting and processing charges. Title charges. Transfer taxes. In Chicago the transfer tax is .75% for buyers, or $2,250 on a $300,000 home, so this can be a big item. Attorneys fees and home inspection costs. The first year’s insurance…

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Can You Believe the Mortgage Rates You see in the Paper (or on the Internet)? Why Advertised Mortgage Rates are “Never Right” – Factors Affecting Mortgage Pricing – Part 2

(This is an update of a previous blog post) The one question I am asked more frequently than any other is, What is your rate? This is a great question because you obviously want the lowest rate, but it’s a question that is impossible to answer. First of all, the rate will depend on what type of loan you are getting, whether you want to pay extra money in points and fees to get the best rate (which is what happens with the low rates you see in ads). Even if you were comparing apples to apples and making sure the loans are priced the same way, you can’t compare mortgage rates without without taking into account all the factors in your personal situation which go into pricing a loan. When  a lender takes on a new mortgage their goal is to minimize their risk and make sure that they…

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Mortgage Pre-Approval – The First Step for First Time Home Buyers in the Chicago Area

Are you in the market to buy a home this year? The first step to buying a home is to see how you best qualify for a mortgage. This means you need to be pre-qualified, or pre-approved for a mortgage. Both terms are different levels of the same thing. With both, you are sharing your financial information with a mortgage loan officer, and they are helping you figure out how much of a home you can afford to buy, and what the best program is for your needs. I often start with a mortgage pre-qualification, which is usually just a conversation over the phone. I often start out the conversation by saying, we are going to play a game of 20 questions (sometimes it turns out to be more). The idea is that I will ask you everything about your jobs and financial situation, your future plans and goals. My…

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13 Reasons Why This is a Great Time to Buy a Home in The Chicago Area

The purchase market has been picking up steam over the last few months.Most of the activity is with new buyers coming in to buy their first home (they have a great advantage, not having a home to sell) and a good portion of what they are buying is the distressed properties, short sales and foreclosures, which are weighing down the market. Recently Fed Chairman Bernanke said that he saw signs that the real estate market is bottoming out and stabilizing. We won’t know if that is the case until after the fact, but there is no doubt that the market is buzzing now. Here are some of the reasons you should (especially if you are a first time home buyer) buy a home now: $8,000 first time home buyer tax credit – This is one of the biggest reasons for home buyers to buy now rather than waiting. If you…

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Illinois Mortgage Rate Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending June 5th, 2009, my take on the week’s financial news and how it affected Illinois mortgage rates. Schools out, summer is here, and mortgage rates are jumping. Mortgage rates are now at the highest point since last November, before the Fed stepped in and started buying mortgage backed securities in an attempt to lower mortgage rates and get the economy moving. Over the last 2 weeks there has been a mind shift in the financial markets. The biggest worry before was of the economy grinding to a complete halt. The markets bigger concern now is that the economy is growing too fast, and that the government is spending too much. The situation is similar to one of those optical illusions which look one way until you shift your perception, and then a different image forms and…

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First Time Home Buyers Get $8,000 Tax Credit After Closing – How to Come Up With Cash for the Down Payment Now

There has been a lot of news lately about the $8,000 first time home buyer tax credit, and a lot of disappointed home buyers when the news was released that you won’t be able to use the credit as part of your minimum down payment. I get calls every day from renters who want to buy a home now, and many of them are well qualified for an FHA mortgage here in Chicago Illinois based on their income and credit situation, but they fall short when it comes to having saved up enough money for the down payment and closing costs. Saving cash is always a struggle, and the no money down loans have all disappeared. So if you want to buy a home, you will need to come up with some cash. For many wannabe first time home buyers this is a cruel twist. Once they buy the home…

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