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

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