July 2010

Refinance Floodgates are About to Open – GDP Lower Than Expected, Mortgage Rates Hitting All Time Lows

The Gross Domestic Product (GDP), which is a measure of the total amount of business in our economy, increased at an annual rate of 2.4% in the the second quarter of 2010. Although this is an increase, it is much slower growth than the first quarter (3.7% increase) and less than the 2.7% that economists had forecast. This means that the economy is slowing down.  At this point in the recovery, after so much money in stimulus has been spent by the Federal government, growth should be accelerating. The fact that it isn’t, especially when taken together with other recent reports, puts to rest the idea that we will be getting back to what was considered normal any time soon. In my opinion the reason for this is that the banks are holding onto the money by not making commercial loans that would normally be approved, it’s like they are…

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With Mortgage Rates at All Time Lows, When Does it Make Sense to Take On An Adjustable Rate Mortgage?

With mortgage rates at all time lows, it makes a lot of sense to fix in your rate and refinance at what may turn out to be the lowest real rates ever. Getting a fixed rate mortgage makes a whole lot of sense for any one who is pretty sure that they will be in their home for a long time. But even now, even with fixed rates as low as they are, fixed rate mortgages aren’t the right choice for everyone. Adjustable Rate Mortgages (ARMs) are priced even lower, and though you are taking on some extra risk, they are the best choice for many. The question is, when does it make sense to go with an adjustable rate mortgage. ARMs are structured in different ways, but the most popular, and safest ARMs are the longer term adjustables which are fixed for a period of time before adjusting. Most…

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Chicago Illinois Current Mortgage Rates for the Week Ending 07/16/2010

The markets are now coming around to the view that inflation is not on the near horizon, and that our recovery is going to be a long, slow grind. As a result, the stock market is faltering and as money rushes into the safer haven of bonds, mortgage rates are at their best levels ever. Consumer confidence readings are down, inflation is nearly non-existent, and the Fed meeting minutes from last month show that the they expect slower growth going forward. The reality is that we are going to have to deal with high unemployment and a tough housing market for quite some time. This is all bad news for the economy in general, but it is a big enticement for those who can take advantage of the lowest mortgage rates since they’ve been keeping track of mortgage rates (there were lower rates years ago, but they weren’t for 30…

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FHA Streamline Refinance – A Big Help for Chicago Area Homeowners With FHA Mortgages

  Mortgage rates have dropped to all time lows. What used to be looked at as super low interest rates (in the mid or even low 5s), are now considered high. You may be able to lower your payment by a lot, often with no closing costs. For homeowners that are able to take advantage of the lower rates, this can mean big savings over time. With home prices lower and tougher qualifying requirements, refinancing is tougher than it used to be. But there are still a number of mortgage programs which make it easier to refinance now. One of the easiest and most beneficial loans available is the FHA Streamline Refinance. FHA Streamline Refinance Loans The FHA Streamline Refinance loan program is only available if you already have an FHA mortgage on on your home (Refinancing into a new FHA loan can make sense for a lot of other…

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Chicago Illinois Current Mortgage Rates Week in Review for the Week Ending 07/09/2010

Last week was a quiet week with no major economic reports released and no bombshells dropped. Without much news, the mortgage bond market was most influenced by the direction in the stock market (when there is optimism in stocks, bonds sell off, and visa versa). The stock market has been selling off over the last few weeks as concern mounts that the recovery is stalling out, and major problems are still brewing in Europe. Last week the stock market bounced higher after touching a level of resistance. The question this week is if the rally in stocks has any legs. We are now getting into earnings season, and over the next few weeks all the major companies will release their earnings for the 2nd quarter. Earnings over the last year have come in better than expected, largely as a result of cost cutting. If they are able to extend this…

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Homepath Financing in the Chicago area – Low Down payment-No Mortgage Insurance Options for FNMA Foreclosed Properties

Foreclosed properties are one of the biggest factors in the real estate market.  Buying a foreclosed home isn’t for everyone, but if you know what you are looking for, you can find bargains. Foreclosures can come form banks, loan servicers and other entities, and the red tape and bureaucracy involved in getting a purchase together and closed, can make it a rough ride. The lenders have a need to sell, but because they are understaffed, and the loan often has to be approved by someone higher up the food chain, you need to have patience and resolve. But some players have moved further along the curve than others, and have come up with more systematic ways of cleaning out their inventory. Fannie Mae, the biggest buyer of loans in the mortgage after market, has 89,000 homes that are now on their books, and they have worked out a system to…

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Chicago Illinois Current Mortgage Rates Week in Review for the Week ending 07/02/2010

Mortgage bonds sold off on Friday, but mortgage rates are still sitting at the best levels of the year.  Earlier in the week the Fed signaled that long term growth would be sluggish, and the unemployment report on Friday gave more evidence to that view. The report came in negative with about 125,000 jobs lost, but most of those were temporary government paid census workers. The silver lining to the report was that the private sector added almost 100,000 new jobs, and the unemployment rate fell from 9.7% down to 9.5%. Upon closer review the silver lining looks more grayish. The reason for the drop in the unemployment rate is that more people have grown discouraged and stopped looking for jobs, so they are now no longer counted. The gain in private sector jobs is good news, but no nearly where we should be in this stage of a recovery…

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Congress Extends Home Buyer Credit For 3 months – But Only for Those With Contracts in Place

Good news for many short sale and foreclosure buyers, Congress passed and President Obama has now signed a bill to give homebuyers another three months to close on their home loans and receive tax credits up to $8,000 ($6,500 for move up buyers). The bill applies ONLY to homebuyers who had a signed contract to purchase a home by the April 30, 2010 deadline. The bill extends the deadline to September 30, 2010, for homebuyers to close on their real estate transaction. The original deadline was June 30th, 60 days after the contract date. This was plenty of time to close for those in a normal transaction, but for those buyers dealing with short sales or foreclosed properties, the timing of the close was out of their control. The banks who hold the mortgage on the distressed properties look at closing dates as suggestions, not firm time lines they are…

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Mortgage Rates Are at All Time Lows – When Does It Make Sense to Refinance Your Mortgage?

We live in interesting times. Over the last several years we have seen a series of refinance booms as rates dropped to what had previously been unthinkable rates. Each time rates dropped we were sure they couldn’t go any lower. But here we are again, and mortgage rates are the lowest they have been since they’ve been keeping track of mortgage rates. The reason for the drop in rates is due to fear of softness in the economy, and this isn’t good news. But when you , if you can save money by refinancing your mortgage this could help by lowering your monthly payment or cutting years off your loan and paying your house off early. Why should you consider refinancing? You can lower your interest rate and payments. You can shorten your loan term and pay your mortgage off early. You can take cash out for home improvements, college…

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