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.

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