This is one in a series of community profiles and a look at how the real estate market is holding up in the community.

Aurora Illinois is both a far west suburb of Chicago, and the second largest city in Illinois.  The town has grown to 171,000 people, and now is spread into parts of 4 counties, Kane, Dupage, Will and Kendall, anchoring the Fox River Valley. Aurora was at one time a thriving industrial city, but it fell on hard times in the sixties and seventies. It’s revival came about as a result of the suburbs spreading westward, with new subdivisions and housing developments sprouting up past Dupage County and into what was once considered the far reaches of the Chicago area. The downtown area is now benefitting from the Hollywood Casino, and the recently restored Paramount Theatre. Aurora is home to the Fox Valley Shopping Mall and the Waubonsee Community College. Located alongside the I-88 Technology Corridor, Aurora is home to many Fortune 500 corporations, and a big employment center.

The Aurora real estate market ranges includes entry level condominiums, older Victorian homes and subdivisions catering to nearly every price point from first time home buyer to executive. The average listing price for an Aurora home was $214,00 in September. The median sale price was at $165,000 in August 2009. Home prices have decreased by about 12% from last year, and the number of homes sold has decreased by about 26% from last year. Foreclosures and short sales make up a big part of the Aurora real estate market.

Aurora mortgage financing has traditionally been made up of conventional and FHA mortgages. Aurora mortgage rates and Aurora FHA loans are available for both purchases and refinances in every type of Aurora mortgage loan. Aurora home loans are readily available, and as an Aurora area mortgage lender, I can help you find the financing package that is best for you.

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Welcome to Illinois Mortgage Rates and News week in review for the week ending September 25th, 2009, my take on the week’s financial news and how it affected Chicago Illinois mortgage rates.

Mortgage rates improved this week as more evidence stacks up that the economy might not have turned the corner yet after all. There was some good news mixed in. The University of Michigan consumer confidence index ticked higher, new weekly claims for unemployment insurance were down again (though still at a high level) and the Fed announced at the end of their meeting that economic activity has picked up. But the troubling news out numbered the good signs by a wide margin. Durable goods orders, a measure of industrial strength, were supposed to go up as a result of the Cash for Clunkers generated orders, but instead it dropped 2.4%. A lot of the good news over the last several months has been about the improvement in the housing market. The numbers for August weren’t nearly as optimistic. Existing home sales fell by 2.7% from the previous month, but were still ahead of sales at this time last year. Home prices are down sharply, though. And the Fed, even though their statement emphasized the upturn, their actions speak louder. They will continue to buy mortgage backed securities through the Spring, and left the door open to extending the program if needed. They know the recovery is still fragile and low interest rates are the key to any housing improvement.

As I’ve said before, bad news is good news for mortgage rates, and rates are now near their lowest point in the last 4 months. We will see if rates continue to fall (a lot of this will be determined by the stock market and what happens with the unemployment report next week), but rates are at a point where if you missed out on refinancing earlier this year, it makes sense again. Most of the purchase market is still first time home buyers trying to find a home and close before November 30^th to take advantage of 90 days to take advantage of the $8,000 first time home buyer tax credit. There is still time, but it is getting closer and closer to crunch time. If you are looking to buy a new home, the first step is a Chicago mortgage pre-approval, give me a call and we can get the process started.

Here are the current Illinois Home mortgage rates 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              5.00%        5.179% APR

15 Year fixed Rate             4.375%        4.489% APR

5-1 A.R.M.                         4.00%        4.173% APR

For Jumbo loans over $417,000

***************** SPECIAL JUMBO PRICING ****************

30 Year Fixed Rate*          5.875%        6.093%*

This 30 year fixed Jumbo is special pricing based on a purchase up to 75% LTV or a refinance to 70%, 680 or better Fico scores. Other restrictions may apply.

**************************************************************

7-1 A.R.M.                        4.875%         5.095% APR

(Another option is to break your Jumbo loan into 2 parts – conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

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

With 1 point origination fee – 45 day lock

30 year fixed rate              5.00%       5.522% APR

With no origination fee – 45 day lock

30 year fixed rate              5.25%      5.529% 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

Call for quotes on FHA 203K Rehab Loans

VA Veterans Administration 0 Down Loans

With 1 point origination fee – 45 day lock

30 Year Fixed Rate            5.00%       5.247%

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.

Illinois Mortgage Rates                   First time home buyer loans

Downers Grove Mortgage Company

We Lend in All 50 States

The FHA Streamline refinance is one of the easiest and most beneficial loans available. This program lets borrowers who are have an existing FHA loan refinance into a lower rate mortgage without having to get a new appraisal or prove their income. The idea behind the program is that these borrowers have already qualified for the loan, and if they could afford the higher payment, they would be in better shape with a lower rate and a lower payment. The FHA streamline refinance or FHA refinance loan has always been a good program, but in this market, with home values down and appraisals a consistent problem, it has been a God send for many, allowing some borrowers to save up to hundreds of dollars each month. But FHA has come under pressure as a result of all the problems in the housing market, so they are making moves to cut their risk and save money. This means that as of loans assigned case numbers after November 17^th, the FHA Streamline refinance as we know it will be gone.

Here are the changes coming in November:

1. Verification of income and cash to close – These are the two biggest changes. The streamline is considered a streamlined refinance because you don’t have to go through the normal mortgage approval process where everything is verified. The new regulations will require a letter from the lender stating that they have verified that the borrower has enough income to qualify and has sufficient cash to pay for the closing costs and escrows needed to close the loan.
2. Seasoning – borrowers will need to have paid 6 payments on their loan before they can refinance. In most cases this won’t make a difference, but in times when the interest rates have dropped sharply, like earlier this year, the borrowers couldn’t take advantage of the lower rate and lower payment unless they already had 6 payments under their belt.
3. Payment history – As it stands now, all the FHA streamline requires is that the mortgage is paid up to date and current. The new regulations require that mortgages with less than a 12 months of payment history have made all mortgage payments within the month due (no late payments). For mortgages older than one year, the borrower can’t have more than one late payment in the last 12 months, and none in the last three months.
4. Net tangible benefit for the borrower – This means that the mortgage lender has to show that the borrower is benefitting from the refinance by getting either a lower payment, reducing the time he will pay on the mortgage or converting from an ARM into a fixed rate mortgage. This only makes sense and has been put in as a consumer protection because too many loans have been made where the borrower is lowering their interest rate, but because of all the upfront charges, they aren’t getting any real benefit from doing it (the mortgage broker is, though). This is already the law in Illinois.
5. Maximum combined loan to value – As the program is set up now, FHA will let you subordinate your second mortgage or home equity loan (keep it in place with the banks permission), no matter how much the combined value of the 2 loans is compared to your home’s value. With this change they are now capping it at 125%, or the loans can’t be over 25% more than what your home is worth. In the real world this won’t make much of a difference. Most second mortgage lenders don’t want to offer subordinations over the home’s current value anyway, and even if FHA allows it, the lender funding the mortgage may not.
6. Appraisal guidelines – One of the big advantages of the FHA streamline refinance, especially in this market, is that the borrower can in most cases roll the closing costs and escrow charges into the new loan amount, reducing the cash they need to come up with at closing. The new rules will require that if you want to roll in costs, you will need a new appraisal. If property values are down, as is the case for many borrowers, they will need to come up with the cash upfront and show that they have the funds available.
7. Discount points – After the changes take place, borrowers won’t be able to roll discount points into the new loan to buy down the rate. This is another rule that makes sense to me. I’ve seen too many companies that prey on borrowers by offering below market rates, but then piling on the points (which increases the loan amount and the payment) in order to get the lower rate. This rarely makes sense for the borrower, even if they will stay in the loan for the full 30 years.

Here is a breakdown of how the FHA Streamline Refinance Program works now. If this loan will work for you, do it now, time is running out.

The FHA streamlined refinance is only available for borrowers who currently have an FHA mortgage (if you don’t, you can still refinance into an FHA mortgage, but it will be a fully documented mortgage). Because FHA is a government program, and its mission is to increase home ownership, they have designed this program as a way to make it easier for borrowers who are already paying their mortgage on time to lower their payments without going through the entire qualifying process.

There are two types of FHA streamlined refinance, one where you can add in all your closing costs and pre-paids, but it requires a new appraisal to show you have enough equity to support the new loan amount. The other is an FHA streamlined refinance with no appraisal. This program does not require a new appraisal (which makes a difference if your property value has gone down). You can still add closing costs and escrows into the new mortgage amount, but your new mortgage is capped at the amount of your initial loan.

Here are some of the features of the Current FHA streamline refinance:

• No credit qualifying. This is not credit score based and it is not even necessary to pull a full credit report. Your mortgage does need to be up to date, and current and we will look at your payment history over the last 12 months.
• No income qualifying. When we take a streamlined application, we don’t even look at your employment, income or debts. The logic behind this is that if you are able to handle your mortgage payments and other debt now, you will not have any trouble when the payment is lowered.
• FHA mortgage refinance Loan. The mortgage needs to be an FHA loan, and it has to already be insured by FHA (If the lender who made the loan hasn’t gotten the loan insured yet, you will have to wait until it is in their system).
• You can’t receive any cash at the closing.
• In order for the loan to be approved, you will need to show that this loan is helping your situation. This means a reduction in your payment by at least $50 per month.
• The actual closing costs on these loans are low, the FHA commitment fee and title charges are the only costs needed. With most of the streamlines I have done, we have paid these costs through the premium we receive from the lender, so the borrower isn’t paying it directly.
• With FHA there is always an up-front mortgage insurance fee that needs to be paid. Depending on when you bought the home, you may get a refund of a portion of the fee you paid initially. This works on a sliding scale. You will get a large portion of the fee back in the first year, but it is all gone by the end of the third year. If you get a refund it will be applied against the new fee, with the balance financed into the new loan amount.
• One other thing to keep in mind is that you want to close your loan as near the end of the month as possible. FHA, unlike conventional mortgages, charges interest on their payoffs on a monthly basis, not per day. So you will pay the same amount of interest if you close on the first day as you would on the last day. You still have to allow for the 3 day right of rescission, and in a market like this getting a title spot and closing within your lock term is more important.

FHA used to be a major loan option, but it all but disappeared for a number of years as all sorts of low down payment plans came out on the conventional side. With conventional loans tightening, FHA made a resurgence last year. This means that older loans will likely be eligible for streamlines with the appraisal, but most of the newer loans will be doing the loan without the appraisal. Even if there are no closing costs involved, when you close on a loan you will need to set up a new escrow account and pay interest to the end of the month. Some of this will be able to be added in to the new loan amount, but without an appraisal you are capped at the original loan amount. Keep in mind that you will skip your next month’s payment and get the money in your escrow account back from your current lender in the next several weeks after closing, so it will be a wash in the long run, but if you bought with the minimum down payment you will probably need some cash at closing.

The FHA streamlined refinance is a great deal for most borrowers, and a quick and easy way to take advantage of the low rates we can now offer.

Illinois Mortgage Rates                   First time home buyer loans

Downers Grove Mortgage Company

We Lend in All 50 States

This is one in a series of community profiles and a look at how the real estate market is holding up in the community.

Glen Ellyn, Illinois is an affluent suburb of about 27,000 people near the center of Dupage county, in Chicago’s western suburbs. Glen Ellyn was once known as a resort town, back in the late 1800s, when a hotel was built alongside picturesque Lake Ellyn. The hotel is long gone and Glen Ellyn is no longer a get away destination, but the town has retained its charm. The tree lined streets of its down town area showcase stately older homes, while the south end of town has more subdivisions built in the sixties and seventies. The downtown business district includes shops and dining as well as the Glen Theatre. The nationally recognized community college, College of Dupage (C.O.D.)  is in Glen Ellyn as well as Glenbard West and Glenbard South high schools.

The Glen Ellyn real estate market includes some condos and starter homes, as well as homes priced well over the one million dollar range. The median priced home in August 2009 was $305,000, reflecting the fact that most of the sales activity is now in the lower price ranges. The average listing price last month was $498,000. The median sale price has decreased by about 16% from last year, and home sales are off about 17% year over year.

Glen Ellyn mortgage financing has traditionally been made up of conventional and jumbo mortgages. Over the last two years as home prices have come down and the FHA loan limit has been increased to $410,000, FHA loans are now make up a big portion of the loans closed in Glen Ellyn. Glen Ellyn mortgage rates are made up of a combination of conventional mortgage loans and Glen Ellyn FHA loans, and though there aren’t currently a lot of sales in the upper price ranges, Glen Ellyn jumbo mortgage loans are still a significant part of the market. Glen Ellyn home loans are readily available, and as a Glen Ellyn area mortgage lender, I can help you find the financing package that best meets your needs.

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No Obligation Free Mortgage Pre-Approval

Welcome to Illinois Mortgage Rates and News week in review for the week ending September 18th, 2009, my take on the week’s financial news and how it affected Chicago Illinois mortgage rates.

This week marked the one year anniversary of the fall of Wall Street giant Lehman Brothers, the point where the financial system shifted from crisis into near meltdown mode. After the government declined to rescue Lehman, forcing the company into bankruptcy, the credit markets froze, short term interest rates soared and the stock market was on the verge of a crash. AIG was the next domino to fall, and the government stepped in this time. The mood at the time was bleak, and the possibility of a Great Depression 2.0 was all too real. Since then, the government has gone on a massive spending spree and though the economy is still a mess, a sense of normal has returned. Unemployment is still high and growing, foreclosures are still a real threat, but the stock market is on a tear and all the signs say we’ve passed the worst of the crisis. Fed Chairman Ben Bernanke made it official this week, saying the recession is “very likely over”.

Time will tell if Big Ben has got it right, but all the reports coming out this week do show improvement. Retail sales were up more than expected, industrial production rose and unemployment claims are slightly improved. Inflation numbers came in tame, and the Philly Fed report showed that while the economy is still weak, there are areas that are gaining strength. The real estate market is picking up too, and there is almost a frenzy at the lower price levels as first time home buyers rush to buy and close before December 1^st to take advantage of the $8,000 first time home buyer tax credit. The economy is clearly much improved, but the big issue going forward will be if it can maintain this momentum, and what happens when the government starts to take away all the extra support it has been giving. My guess is that the economy isn’t any where near strong enough to stand on its own, so federal support (everything from extra tax credits, money to buy mortgage bonds and increasing the money supply) will be continuing for quite some time.

FHA confirmed this week that they will fall below the 2% reserve level required by congress. This doesn’t mean that the program is in trouble, as some have said, it is more a result of their vast increase in market share over the last 2 years. FHA loans were nothing but a niche product in the last 8 years, but now make up about 40% of the loans originated. FHA has announced through a series of new mortgagee letters that they will be making a number of major changes in how the program works and to shore up their financing and reduce their risk. I’ll have more on this later, but most of these are common sense proposals that won’t change the over all benefits to FHA home buyers. There are some changes, like the adoption of the HVCC appraisal code, which I hope they reconsider before the policy takes effect next January.

Mortgage rates stayed in the same range this week, a good result considering that most of the economic news was good (bad news is good for mortgage rates) and the stock market continued to rally. The market sold off on Friday, pushing rates slightly higher, but this happened in the absence of any news, and Fridays tend to be the most volatile day for mortgage rates. Mortgage rates are still near the best part of their range, and unless something big happens, I expect rates to continue to go in the same range we have seen over the last month. If you are looking to buy a new home, the first step is a Chicago mortgage pre-approval, give me a call and we can get the process started.

Here are the current Illinois Home mortgage rates 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              5.125%        5.273% APR

15 Year fixed Rate             4.50%         4.674% APR

5-1 A.R.M.                         4.00%        4.173% APR

For Jumbo loans over $417,000

***************** SPECIAL JUMBO PRICING ****************

30 Year Fixed Rate*          5.875%        6.093%*

This 30 year fixed Jumbo is special pricing based on a purchase up to 75% LTV or a refinance to 70%, 680 or better Fico scores. Other restrictions may apply.

**************************************************************

7-1 A.R.M.                        5.125%         5.287% APR

(Another option is to break your Jumbo loan into 2 parts – conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

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

With 1 point origination fee – 45 day lock

30 year fixed rate              5.00%       5.522% APR

With no origination fee – 45 day lock

30 year fixed rate              5.25%      5.529% 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

Call for quotes on FHA 203K Rehab Loans

VA Veterans Administration 0 Down Loans

With 1 point origination fee – 45 day lock

30 Year Fixed Rate            5.00%       5.247%

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.

Illinois Mortgage Rates                   First time home buyer loans

Downers Grove Mortgage Company

We Lend in All 50 States

If you are a first time home buyer looking to buy and close on a condo before the November 30^th tax credit deadline, things just got a little easier. FHA just pushed back the date that the new condo approval process starts from October 1^st back to November 2nd. FHA has been the go to program for home buyers who don’t have a big down payment saved up, and the FHA spot condo has been on fire over the last year. The FHA spot loan is a way for buyers to purchase condos that aren’t on the FHA approved list (most condos aren’t) as long as they meet FHA guidelines. The program has been a great boon to home buyers, but there were a lot of otherwise well managed properties that didn’t fit the guidelines. At the beginning of the summer HUD announced that they were overhauling the process for approving condos. The new FHA Condo approval process means that a lot more properties will be eligible for FHA financing, but it will eliminate spot loans and all the condos on the approved list (except those approved in the last 12 months) will need to be re-approved. The new rules were supposed to take place on October 1^st, and a log jam of applications was expected since all FHA Direct Endorsement lenders need to submit 5 test cases before they are able to approve condos under the new guidelines. Pushing the deadline back a month means condo buyers (and here in the Chicago area, this is a good portion of first time buyers) now have more time to find and close on their condo purchase.

If you want to see what is currently on the FHA condo approval list, here is the FHA condo search tool. (The search works best for if you search by zip code – Search Pre- HRAP/DELRAP to see what was on the old approved list.)

If you are looking at a condo that isn’t on the list, an FHA spot loan may be the best option. This means we will approve the building at the same time we approve your loan. If you’ve identified a property and want to see if it will work, the first thing you should do is talk with your mortgage lender and have them get an FHA condo questionnaire sent out for the building. This way you will get a quick idea of whether the property will work, before spending a lot of time and money trying to find out.

Here is what is needed for an FHA condo spot approval:

• The condominium project must be complete, including all common areas and facilities.
• Control of the common areas must have been turned over to the homeowners
• association for at least one year.
• The owners association must provide evidence that the project has the appropriate
• hazard, liability and flood insurance.
• Individual units in the project must be owned fee simple. The project’s legal documents must provide for undivided ownership of common areas by unit owners.
• The project’s documents should not place any legal restrictions on conveyance. Any provisions that seek to limit the free transferability of title is unacceptable. Such restrictions include rights of first refusal and restrictive covenants.
• At least 90% of the units in the project must have been sold.
• At least 51% of the units in the project must be owner occupied.
• No single entity may own more than 10% of the units in a project. The 10% restriction does not apply when the ownership of less than four units would disqualify an otherwise eligible project. The Department recognized that the 10% cap on the number of units that may secure FHA insured mortgages in a given project can place a small regime at a disadvantage, since only a few units will invoke the limit. Accordingly, a two tiered system was established. For condominium projects having more than 30 units, no more than 10% of the units may have FHA insured loans at any given time.
• Condominium projects consisting of 30 units or less, can have up to 20% of the units encumbered by FHA insured mortgages under the spot loan rule.

This system will be changing soon, and the new process will make FHA financing available for a lot of homes that aren’t eligible now. But there will be some problems along the way until everyone gets the bugs out of this new system. With the extra 30 days now is the time to take advantage of the spot loan, before it goes away for good.

Illinois Mortgage Rates                   First time home buyer loans

Downers Grove Mortgage Company

We Lend in All 50 States

Welcome to Illinois Mortgage Rates and News week in review for the week ending September 11th, 2009, my take on the week’s financial news and how it affected Chicago Illinois mortgage rates.

The Summer is over and mortgage rates are rallying again, now nearing the low rate we saw earlier this year before the rates jumped at the end of May. This move is all the more significant because there are many factors which, on the surface, would normally push rates higher. The stock market is still going up, the economic reports were generally improved, and there were two big auctions of government debt which means more supply on the market and more competition for mortgage bonds. Good news is generally bad for mortgage rates, but it seems like something bigger is happening in the market. Rates are improving even as the economy improves because the market is now discounting the threat of inflation any time in the near future. Even as the government (actually, governments worldwide) prints money at a record pace, there is so much unused capacity in all areas of the economy, and with high unemployment labor costs are still trending lower, so there is no place for inflation to take hold. This makes it safer for investors to buy mortgage backed securities and other bonds, and is sending rates down. If you are looking to purchase a home, or if you missed out on refinancing your home earlier this year, opportunity is knocking again.

The economic news this week wasn’t completely sunny, but compared to the dark clouds we’ve grown accustomed to, the rays of sun peeking through are great news. The University of Michigan consumer sentiment index was up sharply from the month before, increasing from 65.7 to 70.2. This is a nice increase, but still a low reading. Initial unemployment claims were down by 26,000 from the previous week, more evidence that the worst of the job losses are behind us. But again, unemployment is still high and most experts don’t expect the unemployment rate to peak until sometime next year. The Fed Beige Book was released this week, and it too showed signs for optimism. The Beige Book is a survey of business conditions throughout the country. It reported that most areas of the country had stabilized, while some were showing relative strength over the last month. Part of the increases were due to the successful cash for clunkers program, and the report also showed that retail sales are still flat all over.

Chicago based Corus Bank, king of condo lending during the boom times, and now the lender of record on defaulted condo complexes all across the country, officially went bust and was taken over by the FDIC on Friday. Corus has been on the death watch for quite a while now. They specialized in condo project financing, and they put most of their money into loans for complexes in the boom areas of Florida, Las Vegas and California, now the hardest hit real estate markets. The FDIC is expecting a loss of at least 1.7 billion after all assets have been sold.

The Chicago real estate market is nearing the boiling point. First time home buyers are starting to feel the pressure, and contracts are coming in at a quick pace. I’m also getting a lot of calls from buyers who are just starting the process now. There is now less than 90 days to take advantage of the $8,000 first time home buyer tax credit before it expires on November 30^th. That is still plenty of time to buy and close on a home, but if you are bidding on short sales, which are a big part of what is being sold, the time frame for getting the bank approval for the sale takes longer, and you may not meet the deadline on these. Also, the FHA condo process is changing on October 1^st,so if you want to buy a condo with an FHA spot loan, or a condo that is currently on the FHA approved list, you need to do it now. After October 1^st, expect a backlog as all FHA direct lenders across the country need to submit 5 test cases to HUD before they can underwrite and approve condos to the new rules. For the first step in buying a new home, call me for your Chicago mortgage pre-approval so you are ready and able to meet the deadline.

Here are the current Illinois Home mortgage rates 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              5.00%        5.164% APR

15 Year fixed Rate             4.50%         4.674% APR

5-1 A.R.M.                         4.00%        4.173% APR

For Jumbo loans over $417,000

***************** SPECIAL JUMBO PRICING ****************

30 Year Fixed Rate*          5.875%        6.093%*

This 30 year fixed Jumbo is special pricing based on a purchase up to 75% LTV or a refinance to 70%, 680 or better Fico scores. Other restrictions may apply.

**************************************************************

7-1 A.R.M.                        5.125%         5.287% APR

(Another option is to break your Jumbo loan into 2 parts – conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

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

With 1 point origination fee – 45 day lock

30 year fixed rate              5.00%       5.522% APR

With no origination fee – 45 day lock

30 year fixed rate              5.25%      5.529% 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

Call for quotes on FHA 203K Rehab Loans

VA Veterans Administration 0 Down Loans

With 1 point origination fee – 45 day lock

30 Year Fixed Rate            5.00%       5.247%

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.

Illinois Mortgage Rates                   First time home buyer loans

Downers Grove Mortgage Company

We Lend in All 50 States

Welcome to Illinois Mortgage Rates and News week in review for the week ending September 4th, 2009, my take on the week’s financial news and how it affected Chicago Illinois mortgage rates.

Labor Day marks the end of Summer and a last chance at BBQs, festivals and one more day at the public pool before it closes for the year. Naperville has their Last Fling music festival and there are several neighborhood fests in Chicago. Enjoy the long weekend.

There was both good and bad news in the BLS employment report, the indicator that most affects mortgage rates. The good news was that the pace of unemployment was sharply down, with 216,000 jobs lost for the month. This was slightly better than expected, and much better than the 600 and 700 thousand jobs lost each month at the beginning of this year. The bad news is that there are still a whole lot of jobs being lost. The unemployment rate ticked up to 9.7%, and we are now at the highest unemployment rate since June of 1983. The economy has lost nearly 7 million jobs since the recession officially started back in December 2007. Even as the economy shows signs of new life, the employment picture will still be bleak. Unemployment is likely to stay high through the end of next year. With unemployment high, this means more foreclosures in the future.

Real estate activity is picking up, and the next two months should be strong with all the last minute, first time home buyers getting in before the November 30^th deadline in order to get the $8,000 first time home buyer tax credit. Time may be even shorter if you are looking at condos. FHA changes the way that they look at condos as of October 1^st. This change means no more spot loans, and any approved condos that haven’t been approved in the last 12 months will now have to be re-approved. This is a good move in the long run, and it will mean a lot of properties that weren’t eligible for financing before will now be eligible. But in the short run, expect a mess. FHA is requiring that all FHA direct endorsement lenders submit 5 test cases to them before they have the authority to approve condos on their own. HUD will be deluged with files on October 1^st, and it may take months for them to work through their backlog. If you want to buy a condo, and you plan to use an FHA mortgage, you best get moving. There is no guarantee that your loan will close by the November 30^th deadline if you start your financing after October first. For the first step in buying a new home, call me for your Chicago mortgage pre-approval so you are ready and able to meet the deadline.

So how did all this news affect mortgage rates this week? Mortgage bonds sold off on low volume Friday afternoon, but on the whole the week was a good one for mortgage rates. We are now back to the low point for mortgages at the end of May, right before rates surged at the beginning of the Summer. Volume has been low all this month, as many traders took time off. We will se if rates continue to improve as volume increases over the next few weeks. In order for rates  to get back to the lows we were at in the early part of the year, we will have to see a sharp sell off in the stock market (money flows out of stocks and into bonds, which affect mortgage rates). September is historically a bad month for stocks. Have a great Labor Day weekend, and stay tuned.

Here are the current Illinois Home mortgage rates 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              5.125%        5.282% APR

15 Year fixed Rate             4.50%         4.674% APR

5-1 A.R.M.                         4.25%        4.342% APR

For Jumbo loans over $417,000

***************** SPECIAL JUMBO PRICING ****************

30 Year Fixed Rate*          5.875%        6.093%*

This 30 year fixed Jumbo is special pricing based on a purchase up to 75% LTV or a refinance to 70%, 680 or better Fico scores. Other restrictions may apply.

**************************************************************

7-1 A.R.M.                        5.25%         5.396% APR

(Another option is to break your Jumbo loan into 2 parts – conventional to the limit of $417,000 and a HELOC or fixed second mortgage for the rest. The blended rate is usually much better than a single loan would be.)

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

With 1 point origination fee – 45 day lock

30 year fixed rate              5.00%       5.522% APR

With no origination fee – 45 day lock

30 year fixed rate              5.25%      5.529% 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

Call for quotes on FHA 203K Rehab Loans

VA Veterans Administration 0 Down Loans

With 1 point origination fee – 45 day lock

30 Year Fixed Rate            5.00%       5.247%

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.

Illinois Mortgage Rates                   First time home buyer loans

Downers Grove Mortgage Company

We Lend in All 50 States

One of the biggest trends in the real estate market this year has been the amount of sales made up of distressed properties, that is, foreclosures and short sales. These properties are selling for a discount, and I’ve seen some amazing deals over the last year as borrowers buy homes for a fraction of the cost these homes would have sold for just a few years ago. There are some great bargains, but one of the problems with foreclosures (and to a lesser extent short sales) is that the condition of the home can make the property difficult to finance. Foreclosures often suffer from neglect, deferred maintenance and outright abuse. I don’t know how many homes there are in the Chicago area that sat through the winter with no heat and without being winterized, but I guarantee, the number would be big. This means there were a lot of homes this spring with water damage and mold. Add in all the homes which have other problems, maybe they need a new roof or furnace, or a rehab of the bathrooms or kitchen, or maybe they just need to be modernized. Whatever the problem, there are a lot of homes that either can’t be financed because of their condition, or they need work which you won’t be able to afford to do after you buy. The good thing is, there is a solution to this problem, the FHA 203K rehab loan.

The FHA 203K is designed so you include the cost of repairs and improvements into a purchase price and wrap it all into one loan. FHA divides the program into two sections, the full 203k and the FHA 203K streamline, or Mini K. The full program is for major projects and with this you can do anything from a major remodel to a full gut rehab. But the full 203K can be a complicated and expensive loan. You will need to hire an FHA 203K consultant to advise you and help with the paperwork, and getting it all done can be a big commitment. This is the right choice for big projects, but for most home buyers, the better choice is the FHA 203K Streamline.

The Streamline 203k is meant for more manageable projects, and the cap on spending is now set at $35,000. The reality is that you can get an awful lot accomplished with $35,000. I just closed on one loan where the new buyers finished their basement and added a bathroom, and it came in well under the spending limit. The Streamline 203K program is a great alternative because it makes the process simpler and with the scope of work more manageable, this means it is easier to close. This program also fits the reality of the market. Most of the properties out there don’t need gut rehabs, they need specific work done in order to be eligible for financing, or to improve the livability of the home. You can’t change anything structural with a Streamline 203k, but other than that you can tackle almost anything the budget allows.

Here is how the project works:

First step, get pre-approved for an FHA mortgage – This program is different in how it treats the property, but your credit approval will be the same as with any other FHA approval. This means a down payment of only 3.5% (based on the purchase price plus the repairs), credit scores of 620 and above, and all the other first time home buyer friendly features that FHA is known for. You need to know how much of a loan you can afford and how much cash you will need to close on the loan. One of the great features of FHA is it allows the seller to pay your closing costs (when negotiated in your contract, up to a max of 6%). Knowing how much cash you will need up-front helps when it comes time to structure your purchase in a way that works for you.

Find the house you want to buy – This sounds like the easy part, but that’s not always the case. If you are looking at distressed properties this means the bank that holds the mortgage has to approve the contract. This can take some time, and some banks are more responsive than others. Either way, when putting the contract together, make it subject to approval as an FHA 203K loan. Decide what work needs to be done, and get a rough idea of what it will cost.

Find a contractor that will do the work, and get the bid in writing – Getting the bid is the crucial step. You need a contractor who will put in a detailed bid showing exactly what work will be performed and with specifications and cost break downs for everything, including both materials and labor. We aren’t able to order the appraisal until the contractors order is in. The appraiser will use this bid to determine what work will be done, and what the value of the home will be once all the work is completed. Along with the bid, we will need to approve the contractor, this means your contractor will need to furnish us with a package showing his business licenses, a resume showing similar work done, and proof of insurance.

Get the appraisal – This is the biggest difference between an FHA 203k and a normal FHA mortgage. We order the appraisal through one of our FHA approved appraisers. They are actually doing two appraisals at the same time. The first part of the appraisal is based on what the property’s value is now, in its present condition. The second part values the property as it will be once all the work has been completed. The appraiser will take the detailed contractor bid and incorporate this into the appraisal. After the close, the work will have to be completed as laid out in the appraisal.

Underwriting and closing – Once we have the full file with the completed appraisal, the loan is underwritten like any other FHA loan. There is more paperwork on our end, and we need to make sure that everything conforms to the guidelines and all the pieces of the puzzle fit right. Once we have a clear to close approval, the loan is ready to close. The closing of a 203K is similar to any other closing. One thing to keep in mind, though, is you won’t get the money for the rehab at the closing.

After the close – It takes around 30 days before the loan is set up in the system. At this point you will get a check, made out to you and the contractor (or each contractor if you are using more than one) for half of the rehab amount. This is to cover the materials and to get the work started. You will also get a check list which tells you exactly what needs to be done from that point on. Once the work is completed an inspector comes in to confirm that everything was done according to the original bid, and once you have the sign off you get the rest of the money to pay the final bills. If the work comes in under the budget, the balance will be used as a principal pay down on your loan. All the work has to be completed within 6 months.

The FHA 203k rehab loan is a great way to take a rough home that you can buy for a bargain price, and turn it into a finished gem. This loan is a way that many buyers are using to add value to their home and gain instant equity. This is obviously a simplified rundown for the FHA 203k and if you don’t do things exactly right, there are a lot of little obstacles that can trip you up. But if you have a good experienced loan officer as your guide, the process is easier than you might think, and the best way to improve a home while keeping your investment and payments low.

Illinois Mortgage Rates                   First time home buyer loans

Downers Grove Mortgage Company

We Lend in All 50 States

This is one in a series of community profiles and a look at how the real estate market is holding up in the community.

Wheaton Illinois, a suburb 25 miles west of Chicago, has a population of 55,000 people and is the county seat of Dupage County. Wheaton is known as the City of Churches, and there are over 60 churches inside its city limits. It is also home to Wheaton College, a top ranked Evangelical Christian college. Wheaton was a dry city up until 1985, not allowing any liquor sales within the city at all. This changed when the Danada Shopping complex was being built, as a way to attract more national restaurants. Wheaton still has a small town feel, and a charming down town with shops to fit every need. Wheaton has been listed as one of the best towns to raise a family, and it is known for the quality of its schools.

Wheaton real estate covers nearly every price point. You can buy starter condos and affordable single family homes, mid priced homes, executive homes priced in the millions. The current average listing price for Wheaton homes is about $430,000, and the average sale price in August 2009 was $300,000. Like most of the area, a good part of the market is now made up of foreclosed properties and short sales. First time home buyers are the most active buyers and the lower tiered homes make up the bulk of the sales now.

Wheaton mortgage financing has traditionally been made up of mostly conventional and with some jumbo and FHA mortgages. Now that the FHA loan limit has been raised to $410,000, Wheaton mortgage rates are made up mostly of a combination of conventional mortgage loans and Wheaton FHA loans. Wheaton Jumbo Loans are also readily available. Wheaton home loans are always in demand, and as a Wheaton area mortgage lender, I can help you find the financing package that is best for you.

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