Welcome to Illinois Mortgage Rates and News week in review for the week ending October 9th, 2009, my take on the week’s financial news and how it affected Chicago Illinois mortgage rates.

Easy come, easy go. Mortgage rates were sitting at all time lows earlier this week, but the direction shifted sharply on Thursday and Friday, sending mortgage rates higher. That’s not to say that rates are awful, they are still near their all time lows. It doesn’t mean that the direction of the market has changed, either. The mortgage rate market is moving up and down based more on traders profit motives and technical factors than because of the economic fundamentals or any change in sentiment. What it does mean is that if you were holding out for even better rates, you missed the boat. Throughout this year, every time that mortgage rates dipped into the 5.0 or below area, hopes rose that rates would keep dropping even lower. But every time rates have hit this area, the response has been a quick up-tick in rates. These are historically low rates, and even if they tick a little lower, the risk of missing the good rates is just as high. The moral here is to lock in your rate when you have the chance, and don’t get greedy.

There weren’t a lot of economic reports released this week. The report with the biggest impact on the markets was the weekly report on unemployment claims. The expectation was for 540,000 new claims, but the actual number was a drop to 521,000, the lowest number since January of this year. This is still a long way from healthy, but a move in the right direction. Mortgage delinquencies are still on the rise. The government programs to stem the foreclosure crisis haven’t made much of an impact so far. There was also new concerns raised this week on the health of the big GSEs, Fannie Mae and Freddie Mac as well as FHA. All three of these entities are now government programs, and together they account for about 80% of the loans originated. They are all under stress because of a combination of low home values and high unemployment. It is likely that this stress will continue until unemployment has stabilized. But stress or not, the government needs to keep financing options available in the housing market, and as they are almost the only game in town, they will continue their role even if it requires more funding.

The real estate market is still hot and purchases to first time home buyers are still driving the market. While the market is hot, we aren’t seeing the big surge of new buyers, trying to get in before the first time home buyers tax credit deadline, that was expected. What I am seeing is a rush for those who have been in the market to find a property and close in time, but not a new wave of buyers who weren’t already out there looking. Some of the new buyers I’m talking with are more interested in getting the best deal on their home (short sale or foreclosure) and they aren’t as concerned with the tax credit. Others are banking on the credit being extended, so they are taking their time and looking for the right house, rather than just trying to get a deal together that they can close before November 30^th. 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%         5.149% 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              5.00%       5.468% APR

With no origination fee – 45 day lock

30 year fixed rate              5.25%      5.473% 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%       5.213%

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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