Welcome to Illinois Mortgage Rates and News week in review for the week ending October 2nd, 2009, my take on the week’s financial news and how it affected Chicago Illinois mortgage rates.

There has been a quiet rally in the mortgage bond market over the last few weeks, and on Thursday, ahead of the Non-Farms Jobs report release Friday morning, the market kicked into overdrive with rates dropping into the 4s for the first time since last Spring. Mortgage rates are dropping because there has been a gradual change in perception of the economy from optimism that it is roaring back and inflation is on the horizon, to a grimmer view where a jobless recovery with no growth is the best we can expect. This is happening even as the economy is showing signs of rebounding. The sense of impending doom we felt earlier this year is gone, and even with the high unemployment rate, stocks have run up and the economy has settled into a new sense of normal. But over the Summer much of the optimism has been based on better, but still grim, statistics. The perception of the economy earlier this year was that the end was near, that changed to a view that the end of the recession was near, and now the outlook is that even if the recession is over we still aren’t going to see much of a bounce any time soon. While stocks have surged higher, much of the profits have come from cost cutting rather than sales increases. So much of life is based on perception, and as the perception shifts back to fear, mortgage bonds benefit, and rates are dropping. The employment report yesterday came in worse than expected with 263,000 jobs lost and the unemployment rate ticking up to 9.8%. The numbers were worse in almost every category. But the market had already taken this into account (buy on the rumor, sell on the fact), and rates stayed about the same as the day before. Mortgage rates are now in the all time low range again, and for those who missed out on refinancing earlier this year, this is another chance to lower your rates.

But these low rates may not last as long this time, and they may not help many of the people who need it most. One of the big factors keeping mortgage rates low has been the Fed’s program of buying mortgage backed securities. This has propped up the market all year, but they have announced that they will be fazing out the program by next Spring. Without Fed support, buyers may require a higher yield, meaning higher mortgage rates to consumers. Refinancing isn’t as easy as it used to be, either. Mortgage guidelines have gotten tougher, and with property values down, getting an appraisal to support the value needed is a real problem. The Obama refinance programs through Fannie Mae and Freddie Mac will help some, and if you have an FHA mortgage, the FHA streamline refinance is a great solution, but the guidelines will change as of next month. If you want to see if you qualify for one of these programs, or to get a quote for a refinance, let me know.

The purchase market is still booming, but we are now within 60 days of the expiration of the first time home buyers tax credit deadline of November 30^th. I am seeing more homes come in with multiple bids as buyers bid against each other as the deadline nears. There is still time to find a home and get the financing, but for buyers bidding on short sales, they are taking a bigger risk now. Some banks are responding to the short sale offers quickly, but for most it is still a long, drawn out process. The question then comes down to, is the home enough of a bargain that it is worth buying even if you don’t get the credit? For most first time home buyers the tax credit is an extra incentive, but not the only reason to buy. With low rates and low home prices this is a buyer’s market either way. But if the tax credit is part of your motivation, this is crunch time. There is a chance that it will be extended, but that isn’t a sure thing by any means. I’ll have more on that later this week. 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              4.875%        5.086% APR

15 Year fixed Rate             4.375%        4.489% APR

5-1 A.R.M.                         3.875%        4.067% 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              4.75%       5.227% APR

With no origination fee – 45 day lock

30 year fixed rate              5.00%      5.239% 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            4.875%       5.118%

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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