Welcome to Illinois Mortgage Rates and News week in review for the week ending November 27th, 2009, my take on the week’s financial news and how it affected Chicago Illinois mortgage rates.

Rates slid a little farther last week, and we are now at the lowest rates of the year. This was a holiday shortened week, but it was jam packed with market moving information. Consumer confidence ticked slightly higher, home starts increased slightly and the Case Schiller Index showed that the housing market is coming back, but still a long ways down from where it was a year ago. The Fed Open Market Committee released their minutes from last month’s meeting, and it amplified what they said earlier in their news release. The upshot is that in order for the economy to continue to recover, they need to keep rates low for an extended period of time. In the minutes they acknowledged that low rates could continue to hurt the dollar on world markets, and there is a risk of inflation, but these risks are low and the economy is still fragile. So expect that short term interest rates will stay where they are for at least a good part of next year. The mortgage bond markets liked this news, and the markets rallied on Wednesday sending mortgage rates a notch lower.

The biggest news of the week may have come at the end of the week, when Dubai World, the Dubai government backed investment company, announced that they were trying to reschedule their debt. This news hit over sea markets hard, and the stock market here got jarred too. The 59 billion dollar debt isn’t too big in global terms, and the big banks that took on the loans have enough problems, but this is just one more, not a fatal blow. This does seem to be more evidence that there are still pockets of the bubble economy that haven’t popped yet. In hind site, Dubai was always an accident waiting to happen. This was a super luxury resort/tax haven, in one of the most inhospitable spots in the world. Like Las Vegas, but without the gambling or in most cases drinking, it was built on decadence. Some of the bubbleicious features included an indoor ski resort (in the middle of the desert) and man mad islands shaped like palm trees and the world. We’ll see if this default was a one time event, or if this continues to pull markets down.

We will know more about the results of Black Friday and the start of the Christmas shopping season later, but the initial results show an increase in the amount spent over all, but less spent per shopper. It looks like the shoppers are just looking for the bargains, and not buying the extra things that the retailers need to keep profits up. As we enter December, real estate usually goes into hibernation mode, but there are signs that this year may be different. The New Home Buyer Tax Credit extension is motivating more people to start looking, and these low, low interest rates are likely to keep the market hopping. If you are looking for mortgage pre-approval anywhere in the country, give me a call and we can get the process started. If you are thinking of refinancing your mortgage, there may not be a better time to get 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. Mortgage rates in other states may be slightly different, give me a call and I will give you an accurate quote for your particular situation. 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              4.75%         4.867% APR

15 Year fixed Rate             4.25%         4.367% APR

5-1 A.R.M.                         3.75%        3.867% 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. 625%       5.129% APR

With no origination fee – 45 day lock

30 year fixed rate              4.875%      5.136% 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            4.75%       4.987%

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.

Here are the reports due to be released this week:

Monday, November 30
• Chicago PMI

Tuesday, December 1
• Construction spending
• ISM Index
• Pending home sales
• Auto and truck sales

Wednesday, December 2
• ADP employment report
• Fed Beige Book

Thursday, December 3
• Jobless claims
• Productivity
• ISM Services

Friday, December 4
• Nonfarm payrolls
• Factory orders

Illinois Mortgage Rates                   First time home buyer loans

Downers Grove Mortgage Company

We Lend in All 50 States

Illinois Home Loans Provider/ Broker. Most respected mortgage bankers in the area.

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Contact Your illinois mortgage company Today

We Offer illinois home mortgage Loans with best mortgage rates

Get Best Advice from illinois mortgage broker

How Much Does It cost to Refinance, and How Long is the Pay Back?

With mortgage rates down near their all time lows again, refinancing is getting hotter (purchases, too). Low mortgage rates give you a chance to lock in the low rate for the long term, lower your payment and take some pressure off your budget. The rates now are the lowest I’ve ever seen and I expect when we look back at this a few years from now, they will seem like the bargain of a lifetime. But while rates are low, if you have compared rates you see in the newspaper or on-line, you might think rates are better than they really are. You might also see that some lenders are showing much lower rates than others, when the reality is that we all get our funds from the same sources, and the true rate shouldn’t vary from one lender to the next by more than an 1/8 or 1/4 of a percent.  So what gives? Why are some lenders able to show such low, low rates? Are they really able to do something that other mortgage lenders aren’t able to do?

The truth is, if it looks too good to be true, it probably is. Most consumers focus on the rate when comparing offers for their mortgage refinance, and mortgage marketers take advantage of this fact by advertising the lowest rates they can. But whether the lowest rate is the best deal for you is more complicated. The other thing you need to be aware of is how much the loan will cost you, and the lowest rates have the highest fees. We (mortgage bankers, brokers and banks) have a whole variety of rate and fee combinations we can offer every day. Each wholesale mortgage lender provides a matrix of price options every day. To get the lowest rate you will have to pay points (1% of the loan amount for each point, which is interest paid up front). I’ve seen Good Faith Estimates which show over 4 points (4% of the loan amount) charged to get a  below market rate. On the other hand, you can go in the other direction. The lender pays us (mortgage bankers, brokers and banks) extra money (called yield spread premium) for bringing in loans at higher rates. We can use this extra premium to pay off all your closing costs and give you a no cost refinance. Most borrowers elect to go with loans that have no points, or one point. The lenders don’t care how you do it, because they will get their money either now or in the future, and it works out the same to them based on their pricing models. For you, the consumer, it can make a big difference. So the big question is, what is the best way to refinance, paying extra money up front to get the lowest rate? Or does it make more sense to pay less money in fees upfront, but get a slightly higher rate?

 For a quick check to see if refinancing makes sense for you, and what the best way to refinance is, you need to consider 3 things:

How much will you save by refinancing?
How much will it cost to refinance?
How long do you expect to stay in the mortgage?

To find out the best option for you, you need to figure out your payback or break-even point. Let me work through the math to show you how this works (the rates and numbers here are all for illustration, not based on market rates now).

The first step is to determine, how much you will save?

For an example, let’s assume that you now have a mortgage with a $300,000 balance and a 5.50%% interest rate. This would give you a payment of $1,703 per month on a 30 year fixed rate loan. With improved rates, lest’s say you can now get the same  mortgage for 4.75% with a payment of $1,565 per month. This is a savings of $138 per month. That is a great rate and substantial savings. Does it make sense to refinance? Maybe, but we still need to know more.

The second step is, how much it will cost to refinance?

If you have spent any looking, you’ve found lots of ads for mortgage companies claiming they offer the lowest rates. But low rates don’t mean a thing if you don’t look at the closing costs too. Closing costs include title fees and the amount the bank charges to process the loan, which includes fees for credit reports, appraisals, processing and underwriting charges as well as Points (up-front interest). The cost can make a big difference for you. In the Chicago area it costs about $1,600 to close a refinance if you don’t pay any points or origination fees (another word for a point).  To see how the closing cost can make the difference, divide your monthly savings into the cost of refinancing ($1,600 divided by $138).  So in our example, it will take you less than a years worth of mortgage savings to pay off the up-front costs. Every month after that will be a true savings. If you are paying 2 points on the same loan ($6,000) plus the normal closing costs, ($7,600) the same loan will take almost 5 years before you would have any benefits from refinancing. The rate should be lower if the costs are higher, but you need to run the numbers on each to see which is the better deal. But there is still one more step.So the lowest rate isn’t always the best deal.

The third step is to estimate, how long do you expect to be in the mortgage?

With interest rates as low as they are, it may make sense to pay extra to lock in the long term savings. But if there is any chance that you may move, the savings may be wasted. In the above example, even if the rate is much better, if it takes 5 years to pay off the closing costs and you sell your home in 6 years, you wasted a lot of money on a refinance. On the other hand, if you stay in your home a full 30 years, you have made a lot of extra savings by paying more up-front to get the lowest rate. The thing to remember is that one size doesn’t fit all, and you need to go with the program that best fits your needs. Most mortgages last 7 years or less (before the homes are either sold or refinanced) so paying higher costs is not always the best deal. 

The idea that the lowest rate is the best deal can be a big problem. When you are comparing interest rate options, make sure that you compare apples to apples and not comparing a quote with points to one without. Pick the option that works for your needs, and don’t over pay to get a low rate if it costs you more in the long run. And make sure you get it in writing. Every lender should be able to give you a written Good Faith Estimate showing how much it will cost to close your loan, and how long your rate will be locked in for (make sure they are able to process your loan during their lock period). This is shaping up to be a great time to refinance, but you need to understand your options. If you would like a quote for a refinance that works best for your situation, give me a call.

Illinois Mortgage Rates                   First time home buyer loans               

We Lend in All 50 States

Illinois Home Loans Provider/ Broker. Most respected mortgage bankers in the area.

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Contact Your illinois mortgage company Today

We Offer illinois home mortgage Loans with best mortgage rates

Get Best Advice from illinois mortgage broker

Mortgage rates are down to the lowest rates of the year, again. We are now hitting the best rates we saw last Spring in the midst of the refinance boom when the economy was still in free fall. Back then, from the beginning of the year until the start of the Summer, mortgage rates were in a flat, even pattern and the low rates were as stable as I have ever seen. By nature, mortgage rates are volatile. Mortgage rates aren’t set, but determined in a market (mortgage backed securities, a type of bond), just like with stocks or other financial instruments. Mortgage bonds bounce around from day to day based on economic reports and changes in trader sentiment. Mortgage bonds are long term investments, so the traders are looking for signs of inflation, which is the enemy of any fixed rate investment. Back in the Spring the big worry was deflation, not inflation, and the Fed had committed to a huge purchase of 1.25 trillion dollars in mortgage backed securities in order to keep mortgage interest rates low. The Fed purchases did the trick, and rates stayed in the low stable range until worries about the build up in public debt shook the market up at the end of May. We are in a very different situation now. The Fed is nearly finished with its buy back program, and with all the debt the government has taken on to keep the economy moving, inflation fears are high (even though there is no sign of inflation now).

The low rates earlier this year were much more understandable. A lot of experts now are shaking their heads and wondering why the rates have improved so much now, and whether these low rates will last. The saying is that bad news for the economy is good news for mortgage rates, but the economic reports coming in now are mixed. The stock market is still holding unto its gains and the dollar is weak, which usually means higher mortgage rates. It seems like there are 2 major reasons that rates are so good now:

1. The margin between mortgage backed securities and treasury bills is shrinking. Mortgage backed securities typically go in the same direction as the 10 year T Bill. US Treasury notes are considered the safest investment in the world, and since they are backed by the US government, there is no risk that the bonds won’t be repaid. With the margin shrinking, this means that investors are looking at mortgages as a safer investment than they considered it before.

2. Investors are finally convinced that the Fed intends to keep short term rates low for an extended time, so long term rates (like mortgages) have less upward pressure.

This is a real surprise that rates are this low now, but if you are able to refinance your mortgage and save up to hundreds of dollars a month, one more reason for Thanksgiving (I had to get that in somehow). If past history is a guide, the lowest rates won’t last long.  If you’ve been holding off for the right time to refinance your mortgage, this looks like the time to pull the trigger.

We offer every type of refinance including:

Conventional refinances including no cost mortgage refinances

DU Refi Plus and Obama refinance programs

FHA cash out and rate reduction mortgages

VA IRRL- Veterans Administration streamlined refinance

Jumbo refinances

Refinancing now isn’t as easy as it used to be. With property values down, home appraisals are coming in low and we require more documentation than we used to. But rates this low aren’t going to last forever. If you could benefit from refinancing your mortgage, give me a call and I’ll see what I can do to help you.

Illinois Mortgage Rates                   First time home buyer loans               

We Lend in All 50 States

Illinois Home Loans Provider/ Broker. Most respected mortgage bankers in the area.

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Contact Your illinois mortgage company Today

We Offer illinois home mortgage Loans with best mortgage rates

Get Best Advice from illinois mortgage broker

As a life long Illinois resident, I’ve spent a lot of time in Wisconsin. Anyone living in Wisconsin knows that Wisconsin is the preferred vacation destination for Chicagoans and Illinois residents in general. Wisconsin has the lakes and open areas that we don’t have around Chicago, and it is a great place for fishing, boating, hunting and snowmobiling, not to mention just hanging out and enjoying nature. And if you are from Wisconsin, that’s not always a good thing. If you live in Wisconsin, it’s not just your playground, it’s where you set down your roots, work and raise your family. And then there’s the rivalry between the Bears and the Packers (though rivalry might not be the right word anymore, since it’s been awful lop sided in the Packers favor over recent years). The point is that Wisconsin and Illinois are linked together, and its sometimes a love/hate relationship. More love on our part.

Over the years I’ve done a lot of mortgage loans in Wisconsin. Part of this is because I have family that lives near Milwaukee, partly because there are a lot of Chicago area home owners that buy a second home in Wisconsin or retire up north to take advantage of the life style. Another reason I’ve done a lot of Wisconsin mortgage loans is because Wisconsin home owners and Wisconsin first time home buyers have discovered that you can usually get better rates and terms when shopping for a mortgage, and we have excellent Wisconsin mortgage rates and every type of Wisconsin home loan. We offer every Wisconsin mortgage program from Wisconsin FHA and VA mortgages, Wisconsin first time home buyer mortgages and Wisconsin Jumbo loans. As a mortgage bank, we fund our own loans and when you call me you are talking with someone with over 18 years of experience in putting together mortgage loans, not someone in a call center. So whether you need a loan to buy your first home in Milwaukee or are refinancing your Jumbo loan in Madison, give us a call. We  might be able to save you some money. And you can even rag on the Bears if you want to.

Wisconsin Mortgage Rates                   Wisconsin First time home buyer loans

Wisconsin Mortgage Company

We Lend in All 50 States

Illinois Home Loans Provider/ Broker. Most respected mortgage bankers in the area.

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Contact Your illinois mortgage company Today

We Offer illinois home mortgage Loans with best mortgage rates

Get Best Advice from illinois mortgage broker

Welcome to Illinois Mortgage Rates and News week in review for the week ending November 20th, 2009, my take on the week’s financial news and how it affected Chicago Illinois mortgage rates.

Mortgage rates are still holding near the lowest rates of the year. These low rates are compounding the experts. The stock market shows signs of faltering, but it is still up near the highs for the year. Oil and gold have had major run ups, and the dollar keeps getting smacked around on the currency market. The government holds new auctions for debt nearly every week and the money supply continues to grow. The economy is still soft, but we are long past the panic and slowly moving forward. At the same time, the Fed is nearing the end of its commitment to buy mortgage backed securities to keep rates low (the Fed has purchased over $1 trillion out of $1.25 trillion promised). All these are usually signs that inflation is heating up, and that mortgage rates should be rising. But rates stayed flat this week, near the lows of the year. What gives?

I think Fed Chairman Ben Bernanke summed it all up in a speech he gave last Monday on the outlook for the economy. In the speech he said that the improvement in the economy is real, but there are some serious issues that need to be addressed going forward, and the recovery won’t be a strong one. As problems, he singled out the lack of credit and how banks are still not lending like they should, and how high unemployment will continue to hold the recovery back. Inflation is likely to be subdued for some time, he said, because of excess slack (more supply than demand) in the world economy. Inflation isn’t likely to be a threat until these factors stabilize. The way I see this, when the credit bubble popped, the economy imploded and left us in at the bottom of a big hole. We need to fill in the hole before worrying about how high of a hill we are building. If the Fed continues to keep short term rates low (which they said they will) mortgage rates should stay in a low range, too. We all know that rates will rise sometime, and when this happens it will likely be quick and brutal. But for now rates are great, and I expect we will stay in a good range (but probably not as good as where we are now) for a good part of the new year.

With Thanksgiving on Thursday, this is a short week for the markets. Most of the activity will be on Monday and Tuesday before traders leave early on Wednesday for the extra long week. Existing home sales, the GDP, and consumer confidence measures will all be released this week, as well as several new auctions of government debt. With the shortened week expect more volatility in mortgage rates. Let me know if I can help you with refinancing your current mortgage, or helping you with your loan when you buy a new home. The New Home Buyer Tax Credit extension is expected to keep the real estate market hopping throughout this winter. If you are looking for mortgage pre-approval anywhere in the country, 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%         5.078% APR

15 Year fixed Rate             4.25%         4.367% APR

5-1 A.R.M.                         3.75%        3.867% 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. 875%       5.369% APR

With no origination fee – 45 day lock

30 year fixed rate              5.125%      5.326% 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            5.25%       5.437%

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

Illinois Home Loans Provider/ Broker. Most respected mortgage bankers in the area.

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Contact Your illinois mortgage company Today

We Offer illinois home mortgage Loans with best mortgage rates

Get Best Advice from illinois mortgage broker

We are getting toward the end of the year, but if you bought a home this year and qualify for the first time home buyers tax credit, you don’t have to wait until you file your taxes next year to get the credit. There is still time to apply and modify your 2008 taxes and get the credit early. In order to do this you will need a copy of your HUD1 closing statement from your closing (it is a legal sized document with 2 columns of figures showing credits and charges for both the buyer and seller) and two IRS tax forms, the IRS Form 5405 First Time Home Buyer Tax Credit Form and the 2008 Amended tax form. The two IRS documents are easy to fill in one page forms. Have your tax return handy and you can use it to fill out everything. It should only take a few minutes, and this will speed up the process of getting your money back as quickly as possible. If you filed your taxes through an accountant or tax service, they should be able to re-file this as part of their service, but it is easy enough to do it on your own.

With the new extension and expansion of the tax credit, more home buyers will qualify. This extension opens the credit up to current home owners and buyers with higher income than what was allowed before. The home buyers tax credit extension covers homes brought under contract up until April 30^th and they have to be closed by June 30^th. 

Here are the details of the New Home Buyers Tax Credit:

1. The credit is for 10% of the purchase price up to a maximum of $8,000 for first time home buyers and up to $6,500 for qualified move up buyers. This means that if you are a first time home buyer and your purchase is $80,000 or more, the credit will be $8,000.
2. The credit is good for properties that are under contract by April 30^th and you have until the end of June to get the financing together and close.
3. It is now available for first time home buyers (a first time home buyer is anyone who hasn’t owned a home in the last 3 years) and move up buyers who have lived in their home for 5 consecutive years out of the last 8.
4. The home has to be for your primary residence. Second homes and investment properties don’t qualify.
5. This is a true tax credit. As long as you stay in the home at least 3 years, the credit is yours to keep. If you sell before 3 years is up, you may need to pay the credit back.
6. If your tax liability is less than the $8,000 credit ($6,500 for move up buyers), you will get the difference as a check back to you. If you have already filed your taxes, you can file an amended tax return in order to take the tax credit in the current year and get the money back quicker.
7. Income caps apply. They have increased the income caps so more home buyers will now qualify. A single buyer qualifies as long as they earn up to $125,000 per year, and couples are maxed out at $225,000 per year. Higher earning borrowers may get a partial credit, but the amount decreases as their income rises.

If you have any questions or need to be pre-approved for a mortgage, let me know.

Free Home Buyers Guide

Illinois Mortgage Rates                   First time home buyer loans  

We Lend in All 50 States

Illinois Home Loans Provider/ Broker. Most respected mortgage bankers in the area.

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Contact Your illinois mortgage company Today

We Offer illinois home mortgage Loans with best mortgage rates

Get Best Advice from illinois mortgage broker

Welcome to Illinois Mortgage Rates and News week in review for the week ending November 13th, 2009, my take on the week’s financial news and how it affected Chicago Illinois mortgage rates.

The big news this week is that rates are back in the 4s. This wasn’t supposed to happen. All the experts have expected that mortgage rates would start to rise as the Fed slowed down on their buying schedule of mortgage backed securities. Stock prices are still hovering at the top of their range, and oil prices have gone up, a sign that inflation fears are in the air. None of this seems to matter. Mortgage bonds usually do best when bad news abounds and fear is in the air, right now all the signals are mixed. Housing is still a mess and unemployment is likely to continue to be bad through all of next year. But there are other signs that business is returning to a more normal pattern. So the question comes down to, are these low rates the start of a bigger move down, or the last gasp before rates start to rise?

Mortgage rates were in this low range earlier in the year up to the beginning of the Summer when mortgage rates surged higher. Since then we have been back in this range periodically, but it’s usually for a short and fleeting time before the rates pop higher. I wouldn’t be surprised if this happens again this time. Usually the best rates don’t last long. At the same time, I expect rates to stay affordable long term. The market is starting to realize that the economy isn’t going to bounce back to where it was and that the Fed is committed to keeping short term rates low for an extended period of time. And even though oil and commodity prices are still high, the conventional wisdom is starting to see that inflation isn’t an immediate threat. In order for housing to recover, mortgage rates have to stay low. So I don’t expect rates to go up any time soon (though eventually they will have to) but the low, low rates like we have now are not likely to last. If you are looking to refinance your mortgage or lock in the rate for your purchase loan, this might be a good time to do it.

We are hitting the time of year when the housing market usually slows down. Traditionally, Thanksgiving is the time when home buyers pull back and hibernate for the winter. It looks like this year will be different. The New Home Buyer Tax Credit extension is already getting new buyers off the sidelines, and though business always slows down for the Holidays, all signs point to a fast start after the first of the year. 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%         5.078% APR

15 Year fixed Rate             4.25%         4.367% APR

5-1 A.R.M.                         3.75%        3.867% 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              4.875%       5.369% APR

With no origination fee – 45 day lock

30 year fixed rate              5.25%      5.464% 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            5.25%       5.437%

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

Illinois Home Loans Provider/ Broker. Most respected mortgage bankers in the area.

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Contact Your illinois mortgage company Today

We Offer illinois home mortgage Loans with best mortgage rates

Get Best Advice from illinois mortgage broker

New Features Will Mean a Smoother Transition and More Condos Eligible for FHA Financing

FHA has pushed back their new condo approval process, again. The new condo approval guidelines were originally due to go into effect back in October. Then  it was moved to November, then December, and now we have one more push back to the beginning of February. The reason they keep pushing these dates back is that they need to get the process right, and there is a running battle over how to do this. Part of this is due to the fact that under these new rules, it will be the FHA Direct Endorsement lenders who will need to certify that the condo project meets all the guidelines. This is a much higher level of accountability than lenders had before with the FHA Spot loan, and the lenders are taking on more risk (If any of the information they certify turns out to be wrong, they have to buy back the loan) and once they approve one condo unit, the project is approved and any other lender can come in and place FHA loans in that project, without having to go through all the extra documentation. There are still a lot of holes in how the process will be administered, and the lenders want to make sure they aren’t taking on too much additional risk for a small potential reward. FHA is also putting together a more advanced Condo Search Tool which will list all the condo projects (including smaller buildings – as low as 2 units) that have made the list, and it takes time to make sure this is bug free.

Another part of the reason this change in the process is coming on so slowly is that FHA is being torn in two directions. One goal is to make sure that FHA only makes solid loans to keep the program solvent. There has been a lot of talk about how FHA is the next time bomb, that loan quality is eroding and as FHA dips below their required reserve level they will need a Government bailout to continue operating. This is a valid concern. Fannie Mae and Freddie Mac, the former pillars of the mortgage industry, have already been taken over completely by the government, and this week Freddie Mac announced that they would need another hit of federal funds. All the major private mortgage lenders have already either bitten the dust or accepted massive bailouts to stay in business. So if FHA followed suit and needed more funds it wouldn’t be a big surprise. This is a function of high unemployment and a distressed real estate market. The competing view here is the reality that FHA has now become the 1,000 pound gorilla in the mortgage market. Especially the condo market. So many condos no longer meet conventional guidelines, and without FHA financing, the amount of buyers able to buy a condo would be much smaller.

Going forward, FHA has to do what it can to carry the real estate market on its back, while maintaining a high loan quality. This is a delicate balance, and it takes time to get the right mix. The new mortgagee letter which pushed back the start date, did clarify some issues and laid the path for a smoother transition to the new process. Here are some highlights:

All  previously approved condo projects will remain on the FHA approved list until at least December 7, 2010. Under the new program, every lender will need to submit their first 5 test cases directly to HUD for approval. As originally written, the new process would only grandfather in condo projects that had been approved in the last 12 months (October 2008), and all others on the approved list would need to resubmit for a new approval. This promised a backlog of applications and a long wait for approvals. This letter extends the approval of all condos currently on the approved list until near the end of next year. The Direct Endorsement lenders will be required to verify the current condition of the project (the amount of non owner occupied units, amount of FHA loans in the project and how many owners are in arrears of their association dues), but this will take some of the pressure off and allow more time for the new process to get up to speed.

The requirements are eased for the first year, making more condo units available for FHA financing. The pre-sales requirements for loans taken between December 7th of this year and December 31st of 2010 will only need to be 30%. This number moves up to 50% in 2011. The percentage of FHA loans allowed in each project will be 50% in the same time period (then lowered to 30% in 2011) and under certain specific cases, it could be up to 100% FHA. These changes mean that more new construction condos will be able to go with FHA financing, and this is a big advantage over conventional financing (where they are requiring 70% pre-sales in most cases).

Under the new guidelines a reserve study is no longer required.  This was one of the big sticking points in the original proposal, as a reserve study would cost money and put more burden on the lender. This is now changed so that FHA is coming in line with Fannie Mae and Freddie Mac, and requiring that the condo’s budget has adequate funds for replacement reserves, capital expenditures and deferred maintenance. This usually means 10% of the budget as a holdback.

The new guidelines allow previously excluded units including 2 and 3-unit condo projects, and condos with a first right of refusal in their decs and by laws to be financed through FHA. even 50% from 51%, allowing a right of first refusal in the condo declaration will now be allowed. These changes will allow more condos to qualify for FHA, and at the same time make it easier for lenders to administer the program, while keeping safeguards in place to keep the program solvent. It seems like FHA is striking the right balance.

Illinois Mortgage Rates                   First time home buyer loans

Downers Grove Mortgage Company

We Lend in All 50 States

Illinois Home Loans Provider/ Broker. Most respected mortgage bankers in the area.

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Contact Your illinois mortgage company Today

We Offer illinois home mortgage Loans with best mortgage rates

Get Best Advice from illinois mortgage broker

Welcome to Illinois Mortgage Rates and News week in review for the week ending November 6th, 2009, my take on the week’s financial news and how it affected Chicago Illinois mortgage rates.

This was a big week for mortgage and real estate related news. This week we had a Fed Open Market Committee meeting, the President signed an extended and expanded Home Buyers Credit, and the unemployment numbers, the biggest market mover, were released. This meant a lot of fear and anticipation, and a greater share of market volatility for the week, but the end result was that mortgage rates trended lower.

There is always anxiety whenever the Fed meets. Once they release their statement at the end of the meeting, the market gurus all go over the wording of the statement looking for secret meanings or clues that point to any change in direction. The statement this time was nearly identical to those over the past year, and the key phrase was that the Fed expected to keep interest rates low for an extended period of time. The worry for the markets, both mortgage bond and stock, is that the massive government borrowing will lead to inflation and higher interest rates. The Fed view is that job loss and the implosion of values in real estate and other assets has made inflation a minimal threat. After the Fed announcement rates improved.

The monthly jobs report was dismal again. There were 190,000 jobs lost in October, and the unemployment rate ticked up to 10.2%, the highest rate since the early 80s. There were hints of good news in the report – the amount of jobs lost is less each month, and the jobs lost over the previous 2 months was revised lower. But even with those few bright spots, the news continues to be grim. The 10.2% rate is bad enough, but when the underemployed and those who have given up looking for a job are included the real number is over 17%. Mortgage bonds surged at the release of this report, and closed the week improved. Mortgage rates are in their best range, even though there is a lot of new government debt coming on the market through new auctions next week.

Over the last few weeks, Congress has been going over the provisions of the New Home Buyer Tax Credit extension. They made it official this week and President Obama signed the new bill into law on Friday. The new bill extends the date that borrowers will qualify for the credit through contracts dated up to April 30^th 2010, and allows up until the end of June to get financing and close. The new bill also expands the credit so that move up buyers who have owned and lived in their home for at least 3 of the last 5 years are now eligible. The credit for first time buyers remains at $8,000 (or 10% of the purchase price up to the $8,000 max) and $6,500 for move up home buyers (or 10% of the sales price maxed at $6,500). They also increased the income limits so that individual home buyers can now make up to $125,000 per year, and married couples can make up to $250,000.

This is good news for home buyers, and though I don’t see this making a big difference this year (home buying always goes down in December), it should make for a strong, and fast start for the market next year. The move up buyer credit will help some, but this is more a case of an added bonus than something that will really get homeowners to sell their homes and buy a new one. Too many homeowners have lost equity in their homes and aren’t able to take advantage of the offer, even though they may have outgrown their current home. Also, the first time home buyers in the market are usually looking for bargains, and they are concentrating on the foreclosures and short sales that are priced the lowest. If these homeowners can’t sell their homes, they won’t be able to move up to a new one. But for those who have equity and can, this is one more reason to take advantage of the low mortgage rates and low home prices available now. 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%         5.168% APR

15 Year fixed Rate             4.375%        4.568% APR

5-1 A.R.M.                         3.75%        3.867% 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              4.875%       5.369% APR

With no origination fee – 45 day lock

30 year fixed rate              5.00%      5.347% 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            5.25%       5.437%

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

Illinois Home Loans Provider/ Broker. Most respected mortgage bankers in the area.

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Contact Your illinois mortgage company Today

We Offer illinois home mortgage Loans with best mortgage rates

Get Best Advice from illinois mortgage broker

UPDATE – It’s official. President Obama signed the bill on Friday November 6th and the bill is now law.

As expected, the Senate has now passed the bill extending the home buyers tax credit and expanding it so that move up buyers will also now qualify. The tax credit was an add-on to a bill that extends aid to the long term unemployed, and it passed by a 98 to 0 margin (you don’t see that very often these days). The current first time home buyers tax credit was due to expire at the end of this month. The new bill will extend the date to properties that are under contract by the end of April, and they will have until the end of June to close. It also expands the credit (at $6,500 instead of $8,000) to move up buyers who have lived in their homes for at least five consecutive years out of the last eight. The bill won’t become a law until it is signed by President Obama, but this is sure to happen soon.

This extension won’t give an immediate boost to the market. Most of the first time home buyers who were ready to buy have already taken advantage of the credit or are in process and set to close by the end of November. The season is also a factor, as December is usually the slowest month of the year for real estate sales. Most home buyers take a break during the holidays, and the cold weather (at least here in the Chicago area) keeps more home buyers indoors. I don’t think this will bring in a flood of move up buyers, either. In order for a home owner to buy a second or move up home, they will need to sell their current home first. A big part of the first time home buyers market is focused on the short sales and foreclosures, which takes inventory off the market, but doesn’t lead to a new sale higher up the chain. Still, this will help the Spring market get off to a faster start, and it could cause some fence sitting home owners to make the plunge and start looking for a new bigger home, which meets their current needs.

Here are the details of the New Home Buyers Tax Credit:

1. The credit is for 10% of the purchase price up to a maximum of $8,000 for first time home buyers and up to $6,500 for qualified move up buyers. This means that if you are a first time home buyer and your purchase is $80,000 or more, the credit will be $8,000.
2. The credit is good for properties that are under contract by April 30^th and you have until the end of June to get the financing together and close.
3. It is now available for first time home buyers (a first time home buyer is anyone who hasn’t owned a home in the last 3 years) and move up buyers who have lived in their home for 5 consecutive years out of the last 8.
4. The home has to be for your primary residence. Second homes and investment properties don’t qualify.
5. This is a true tax credit. As long as you stay in the home at least 3 years, the credit is yours to keep. If you sell before 3 years is up, you may need to pay the credit back.
6. If your tax liability is less than the $8,000 credit ($6,500 for move up buyers), you will get the difference as a check back to you. If you have already filed your taxes, you can file an amended tax return in order to take the tax credit in the current year and get the money back quicker.
7. Income caps apply. They have increased the income caps so more home buyers will now qualify. A single buyer qualifies as long as they earn up to $125,000 per year, and couples are maxed out at $225,000 per year. Higher earning borrowers may get a partial credit, but the amount decreases as their income rises.

To take advantage of the credit you will need to file an IRS 5405 form along with your HUD1 closing statement showing that you have closed on the home. If you have any questions or need to be pre-approved for a mortgage, let me know.

Free Home Buyers Guide

Illinois Mortgage Rates                   First time home buyer loans  

We Lend in All 50 States

Illinois Home Loans Provider/ Broker. Most respected mortgage bankers in the area.

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Contact Your illinois mortgage company Today

We Offer illinois home mortgage Loans with best mortgage rates

Get Best Advice from illinois mortgage broker