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 if there is any hope that the economy will start to reignite. Because of new workers coming into the job market (think of all the college graduates that just finished school) the market needs to add 125-150,000 new jobs each month just to stay even. Also, the gains from the two previous months were revised downward. All this is bad news for the economy, and though this is usually a reason why mortgage bonds would rally and mortgage rates would continue their downward trend, but right before a holiday with low volume and a long weekend ahead, traders got defensive and sold off to lock in some gains. We will see what happens when they get back to work on Tuesday for a real test.

Listening to politicians and pundits talk, it sounds like our biggest problem is how we are going to pay off all the debt we have taken on in recent years. But the markets are singing a different tune. Based on the slide in the stock market and the run-up in bonds, the markets are saying that they are more concerned with deflation. The Fed has set the best rate it offers to banks at 0-.25% so it can’t lower rates to stimulate the economy. But if it is too concerned that we are sliding lower again, it has other tools at its disposal, the biggest being the printing machine it has in the basement. If it decides we are at the danger point again (instead of the molasses slow growth mode we are in now) it could go into a quantitative easing program where they print out money in mass. If that happens, the bond market will turn and rate could quickly pop higher.  If you want to refinance your Chicago area mortgage or get a free mortgage pre qualification, let me know. This could be a great time to pull the trigger.

I hope you have a happy and safe 4th of July!

Here are the current Chicago 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, best FHA rates assume a 660 Fico score, but loans are available with credit scores as low as 620. N0-cost refinances are available, usually for just a slightly higher rate. 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 will take the time to find the rate and program that is best for you:

Conventional loans up to $417,000

For Jumbo loans over $417,000

*A better option may be to break your Jumbo loan into 2 parts a conventional loan 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, especially for the lower end of the Jumbo range.

** 5-5 ARM is fixed for first 5 years, with 2/6 caps it can’t go more than 2% above the start rate for the next 5 years. 2% cap for next 5 years – so a blended rate over 10 years is no more than 1% over the start rate. Super Jumbles available.

FHA LOANS 3.5% down payment FHA Maximum varies by County

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

FHA 203K Rehab Loans

Call for Quote

VA Veterans Administration 0 Down Loans

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.

Peter Thompson 630-479-6424

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