The markets had a short week last week with a break for Thanksgiving, but the reports released continue to paint a picture of an economy that is improving in some areas while still in the mire in others. First, the good news. Retail sales fell 0.6% for the week ending November 20, but are a 2.8% higher year-over-year basis. Retailers are optimistic as we head into the Christmas buying season. GDP (Gross domestic product — the total output of goods and services produced in the US) increased at an annual rate of 2.5% in the third quarter, better than the1.7% growth in the second quarter and a real sign that the economy is improving. Initial unemployment claims fell by 34,000 to 407,000 for the week ending November 20. That’s the lowest level (best reading) since July of 2008. Continuing claims also fell. Analysts say the jobs situation is definitely easing, but it will take a much higher level of growth to help get enough jobs back to lower the unemployment rate. We need 100,000 t0 150,000 new jobs each month just to keep up with the new people coming into the job market, and to help those who are long term unemployed now, we will need stronger growth. But this is a sign that we have turned for the better. Now for the bad side. The housing market is still a mess. New home sales fell again in October, an 8% drop from September and the worst October on record. Existing home sales were also off more than expected. The inventory of homes for sale now sits at over a 10 month supply, but this doesn’t include the shadow inventory of foreclosed homes that are not yet on the market. Orders for durable goods — items expected to last three or more years — fell 3.3% in October after a higher than expected increase in September. This figure is volatile from month to month, and it is improving for the year, but this number surprised on the down side.

The biggest story right now may be what is happening in Ireland and the European Union. Ireland took in a $113 billion dollar bail out from the European Union and the International Monetary Fund in order to avoid defaulting on its bonds. This is the second bailout this year for Ireland, they last dipped into the well in May. In exchange for the money to keep afloat, Ireland has to drastically cut spending, a move that is very unpopular with the Irish citizens. Greece got their austerity pill not too long ago, and Spain and Portugal are in line to take their medicine next. The popping of the economic bubble continues to echo throughout the world. The big question here is how this will affect the long term health of the European Union. The European Union formed to have a common currency, the Euro, to compete with the dollar on the world market. It has been a hard mix from the beginning. The Union doesn’t have a central bank, like the Fed, and relies on each country to maintain their economies growth and debt levels on their own. This pits the interests of strong stable countries like Germany, against those of the weaker members. This is just the latest installment, but this story will continue.

So how did all this affect mortgage rates? In the early part of the week mortgage bonds got crushed, and rates are now at their highest level in the last 4 months. But there are some silver linings behind these dark clouds. First, even with the run up, mortgage rates are still near all time lows. Affordability is high and rates are still over a half point lower than they were at a year ago. If you are thinking about buying a new home, the rates today shouldn’t have any impact at all. If you were looking to refinance and missed the lowest rates, there may be a second chance. Some of the most influential bond market analysts think this move was overdone and we are due for a move lower in rates. This again has to do with the reaction to the Fed’s policy of quantitative easing. Though there are signs that the economy is improving, unemployment is still the major problem. We need much stronger growth in order to do anything to bring this down. The risk of inflation is still very low and the Fed minutes released last week showed they were still more concerned with the threat of disinflation. At the end of last week the mortgage bond market improved. If big investors think the worst of the sell off is over, they may be ready to move in to buy more securities at what could be bargain prices.

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. 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

*(Another option is to break your Jumbo loan into 2 parts a 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.)

** 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 Jumbos 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

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.

You can trust in us to get the job done.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages

QE2, the Fed’s second round of quantitative easing has now been in place for about 2 weeks and mortgage rates are sharply higher. This is the exact opposite of what the program intended, but the markets are now focused on the risk of inflation rather than deflation or disinflation, which the Fed sees as our primary problem. Last week a group of economists and pundits, most associated with the Republican party, came out with a public letter in the Wall Street Journal calling for the Fed to stop the program immediately, again citing inflationary threats. So has the Fed already lost the battle? Is the program a flop already? Time will tell, but if history is a guide, it doesn’t pay to bet against the Fed. Part of this relates to what is really happening in the economy and what the real threat of inflation is, but part of the run up in bond yields and mortgage rates may be tied to normal fear and trading strategies. Mortgage rates fell sharply when word was first leaked about the QE2 program, but the market shifted once the program went on line. This buy on the rumor sell on the fact activity is common in the markets, but the moves were exaggerated. Some commentators have suggested this is a result of big name traders taking big positions in anticipation of QE2 and then selling into strength to take their profit. As the herd panicked and the normal second guessing came in, the market got worse than it was before QE2 was even on the table. Don’t be surprised if the big traders wait until the knife has stopped falling, and step in to repeat the process all over again.

There were some signs this week that the economy was doing better, which feeds the argument that we should leave well enough alone. Retail sales for October were up 1.2% from 0.7% in September, mostly as a result of much better than expected auto sales. But other indicators showed that we are still in the middle of a long, hard slog. The Empire State manufacturing index plunged to -11.14 from 15.73 in October, showing weakness in the manufacturing sector. Business inventories rose and housing starts remained bleak. But the big issue is unemployment, and even if you look at the sunniest view, there is nothing on the horizon which will do anything to bring back the millions of jobs lost. The Fed has two mandates, to control inflation and to promote strong employment. In some ways these goals are at odds with each other. QE 2 is the best hope for stimulating the economy and sparking the job market, but the risk is that they will over stimulate and bring on a spiral of inflation which will leave us worse off than where we started. A counter for this argument is the CPI release from last week. Core CPI (consumer price index) came in flat at 0.6% for the year, the lowest measured since stats began in 1957. PPI (producer price index) results came in with similar results. What this means is that there is no inflation to speak of. The New York Times Floyd Norris showed a graph comparing Japan’s price index based on the popping of their housing bubble, morphed up against ours. So far we are tracking the same disinflationary path. This is what the Fed is looking at, so don’t expect them to turn tail and head in the other direction. QE2 will continue. How effective it will be is still an open question.

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. 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

*(Another option is to break your Jumbo loan into 2 parts a 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.)

** 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 Jumbos 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

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.

You can trust in us to get the job done.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages

The other day I met with a client who had just gotten a contract on a new home. She was excited about being a first time home owner, and she’d just found a home in a great neighborhood at a price and mortgage payment that would have been a fantasy a few years back. As we talked, she told me some of her plans for the home. It was a well maintained home, in great shape, but it was an estate sale and hadn’t been updated in years. In order to make the home the way she wanted, she planned on ripping out all the carpet, replacing it in some areas and refinishing the hardwood floors in others, updating the kitchen, and doing some work on the bathrooms, too. Once this work was done she felt the home would be transformed into an up to date, beautiful home. This sounded like a great plan, and by having the vision and imagination to look beyond the current state to see what it could become, the home was likely to be worth much more once the work was completed.

We then talked about financing options. She had saved enough for a full 20% down payment, which would give her a low monthly payment with no mortgage insurance. But the down payment would use up all of her liquid savings. I asked how she planned to pay for the improvements once she closed. With no savings left over, she figured she would put some of the costs of improvements on her credit cards, and the other projects she guessed she would do a little bit at a time as she saved up for it. Doing it this way would increase her debt and spread the rehab over the next several years. I asked if it would bother her living with the kitchen the way it was until she had saved up enough to get it done. She wrinkled her face, and said she could live with it, if she had to.

The truth is, there is a better way to do this. The FHA 203k rehab loan is usually thought of as a way to take damaged properties (often foreclosures) that can’t otherwise get financed, and making them good, livable homes. This is a great use for the FHA 203k loan program, but only one way to use the program. Using the FHA 203k to do improvements you plan on doing after you buy not only means you can enjoy the house the way you want sooner, but it can actually save you money while improving the value of your home.

Here is how this would work: (this is just an example, feel free to call in for current rates and an accurate quote)

Let’s say you are buying a home for $200,000 and it needs $30,000 of work. Let’s say you were able to put the full 20% down and were able to qualify for a conventional mortgage at 4.5%.

The mortgage payment for a 30 year fixed conventional loan of  $160,000 would be $810. So far, so good. After the closing, if you borrowed all the costs of improvements on your credit cards with an average interest rate of 12%, the minimum payment would be an additional $300 each month. So doing it this way (this doesn’t include the taxes and insurance you would have to pay, as this would be the same with either case) costs you $40,000 up front, and $1,110 per month.

Another option is to buy with the FHA 203k rehab loan. The advantage here is that you can put as little as 3.5% down for the down payment and finance all the improvements into the loan. With this program you will have a higher interest rate (the FHA 203k rehab loan is usually about a half point higher in rate than a normal FHA loan) and FHA mortgage insurance is added to the loan. This means that the payment is quite a bit higher right from the start. So with an FHA 203k the loan amount is based on 3.5% of the $230,000 (purchase price plus repairs), or an $8,050 down payment. If the rate is at 5.0%, the initial payment is $1,203. Add in the monthly mortgage insurance, another $168, and the total payment is $1,372. That is $262 more, but this way you still have an extra $22,000 in the bank.

Let’s take this a step further.

The mortgage interest and mortgage insurance are tax deductable (property taxes, too, but we aren’t including that in this example). So the after-tax payment includes the savings they will be able to write off on their taxes. If you are in the 28% tax rate, the first example (20% down conventional) gives you $168 of tax savings each month (285 of the mortgage interest), or an after tax payment of $942 each month. In the 2nd example with the FHA 203k, there is $308 of tax savings each month (28% of the interest and monthly mortgage insurance) for an after tax payment of $1,064 per month. That means the real cost difference is down to $122, and you still have the $22,000 in your bank account.

Let’s take this one step further still.

After the closing you can refinance the loan (we usually need to see you have made your first 6 payments). One way to do this is through an FHA streamline refinance. Mortgage interest rates fluctuate, but if rates are the same as when you bought, you will probably be able to save about 1/2 a point in rate, or about $70 per month by changing from the FHA 203k to a straight FHA 30 year fixed. It depends on the situation, but you can often do streamline refinances with no closing costs. But in many situations there could be a bigger pay off. If the property condition is poor, or if the property shows poorly because it hasn’t been updated in years, you may be buying at a discount compared to comparable but more desirable homes. By doing the extra work on the property, the value may increase much more than the amount of the repairs. If the value is higher, this could be a way to get into a conventional mortgage, and depending on the new value,eliminate or reduce your mortgage insurance, which could be a huge savings. If you have extra money that you didn’t invest before (like the $22,000 in the example) this could be used to pay down the mortgage.

A few things to know about FHA 203k rehab mortgages -

• You can buy with as little as 3.5% down payment
• All the funds needed can be a gift
• Qualified under common sense FHA guidelines
• The seller can pay all closing costs (current maximum is 6% of the sale price)
• Repairs and remodeling costs are added back and financed into the loan amount
• Streamline FHA 203ks are for repairs up to $35,000 – we can do consultant FHA 203ks for any amount of repairs up to the FHA lending limit
• In the Chicago area the FHA lending limit is $410,000

This can be a great way to go. Make sure you work with professionals who know how to structure the loan to work best for you. Here is some more information on uses of the FHA 203k rehab loan -

FHA 203k rehab loans – the solution to homes with property issues

Chicago FHA streamline 203k rehab loans – a way to turn a rough foreclosure into a finished gem

You can trust us to get the job done.

Peter Thompson                              630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages

Now that the election is over, the 2nd installment of Cook County real estate tax bills are now out. The tax bills are due to be paid next month, and this is sure to dampen some home owner’s holiday spirit. Especially when you consider that the first installment of the 2010 bills will be due just a few months later.  Home values have gone down sharply over the last few years, but the accessed values aren’t going in the same direction. No one wants to pay extra for taxes when their values are down, but with local governments in a cash crunch, they aren’t in a sympathetic mood.

Our real estate tax system is complicated and there are a number of factors that go into calculating the tax bill. The first thing to do is to check your bill and make sure you are getting all the correct exemptions. If you are not getting your homeowners exemption this could make a big difference. But one of the major factors is the accessed value. If you can show that the accessed value is higher than the current market value, you may be able to get your tax bill lowered. There are attorneys and specialists who do this regularly and charge you a percentage of the taxes you saved. Or you can do this yourself.

If the property was purchased within the last 3 years, the assessor will base the new accessed value on the sale price. This might not help you if you bought when the market was still moving up, and now it is down from what you paid. If you have owned the home longer, your accessed value will be based on what comparable homes have sold for recently.

Here is the link to what you need to do to appeal your property taxes in Cook County.

Here is the online Cook county residential property tax appeal form.

Tax appeals are handled the same way in all of the Chicago area collar counties.

Dupage County property tax appeal process.

Kane County property tax appeal process.

Will County property tax appeal process.

Will County tax appeal forms.

Kendall County Assessors Office

Lake County property tax appeal process.

McHenry County property tax appeal process.

Peter Thompson                              630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages

Do you remember what it was like when you were a kid, waiting for Christmas to come? This was a magical time, and, if you were like me, you spent hours looking through catalogs, made up lists that went on for pages and fantasized about all the loot you were going to get. Your parents probably tried to lower your expectations some, saying that this was a big list, and Santa wasn’t going to be able to get you everything you wanted. But maybe there were one or two things that were the real deal, the things that you were really hoping for. Then, Christmas finally came, and there were presents under the tree, and when you unwrapped everything, you got exactly what you expected. Not everything you wished for, maybe, but you did get what you were expecting, which after all was what you really wanted. Maybe you even got a little extra, maybe there were some surprises which weren’t even on the lists your wrote, but were great presents. And then, when all the excitement of Christmas  and unwrapping presents was finally over, you felt a let down. A sense of disappointment. That was the mood in the bond markets this week. The Fed announced a new round of quantitative easing this week (QE2), just as expected, and the details were slightly bigger than expected. But disappointment set in soon.

The markets sold off after the Fed announcement, and though bonds recovered some of the loss, trading for the rest of the week has been extremely volatile. Part of this is also due to the market’s short term focus. QE2 is here because it is the only real plan for getting money into the economy and stimulating growth (along with a little inflation). But the economic reports this week all painted a better than expected picture of the economy.  Nonfarm payrolls increased by 151,000 in October (only 60,00 new jobs were expected), though the unemployment rate was unchanged at 9.6 percent. The ADP employment report showed an increase of 43,000 private sector jobs in October, again, better than expected. The ISM employment index also increased slightly in September, and car sales were much better than expected. These were all good signs and show that there is some life in the economy. But the fact that the patient is breathing is the bare minimum. Especially if the goal is to run a marathon. It takes 100-150,000 new jobs each month to make up for those entering the job market for the first time. It will take much better numbers than what we saw this week to get the economy back on track and reduce unemployment. So time well tell if the Fed’s plan does as hoped and brings rates down further. There are already some analysts saying it isn’t big enough to do the job, and others saying the move will be counter productive, bringing on a round of inflation we won’t be able to control. What this tells me is that we are in an uncharted area and no one knows what the real results will be. Rates may go lower, but don’t be surprised when sentiment suddenly shifts, spiking rates higher. Any way you look at it, if you are thinking about buying a home or refinancing your mortgage, Christmas came early this year.

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. 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

*(Another option is to break your Jumbo loan into 2 parts a 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.)

** 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 Jumbos 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

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

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages

All the markets waited with breathless anticipation over the last month to see what the Fed had up its sleeve to spark the economy back to life. At their last meeting in October, they telegraphed their intention to start another round of quantitative easing, or pumping new money into the system by buying treasury bonds as a way to lower interest rates and force some movement in the economy. Over the last month, analysts dissected each Fed members every speech or statement for any hint of what the details would look like. Over the last week the consensus formed that the Fed would step in with about $500 billion in purchases. The markets, both bonds and stocks, have swung wildly trying to anticipate the announcement and square up their positions ahead of time. Well, the big day finally arrived and, as expected the Fed announced the new quantitative easing program with $600 billion in purchases spread out through the second quarter of next year, along with $250 billion in repurchases with proceeds from payments coming in, for a total of $850 billion. And the reaction? The market panicked and sold off.

By the end of the day the mortgage bond market (which controls mortgage rates) had recovered and the day ended pretty much where it started. So the questions are, why did the market sell off and what happens now? Part of the initial market reaction had to be a knee jerk reaction, buy on the rumor and sell on the fact. But some of the reaction was a result of the details of the program. Most of the purchases were in the short end of the bond spectrum, 10 years and less rather than the 30 year bonds. But most of this was clustered around the 10 year mark, which most effects mortgage rates, so on reflection, this should be about right. Some of the reaction could also be disappointment because though the number was higher than expected, some traders were still expecting a shock and awe number (like the first go around last year). Some analysts are already predicting that this isn’t the whole enchilada, but the first step and that the number will be raised over time.

So back to the real question, how will this affect mortgage rates? The Fed’s goal is to force rates lower. The Fed wants to extend the refinance boom so that lower payments put more money into home owners pockets, which they can spend to stimulate the economy. Even more so, the Fed wants to get the housing market back on track, and the best tool to doing that is with lower rates. If the Fed is betting heavily on this outcome, I do expect rates will slip lower. But last year, after the Fed came out with their first round of easing, rates dropped right away, but then rates popped significantly higher as the investment community worried about how the extra money in the economy would start a new era of inflation. The higher rates stayed in place for several months before dropping back into the range. The key here is that the economy and the markets are so complex, that there is no assurance of exactly what will happen, even though we know what the intention is. Mortgage rates are near all time lows now, and they are likely to go lower, but no one knows when the party will end. If you are thinking about refinancing, or in the market to buy a home, my advice is to get your paperwork together and start moving. Let me know if you want a quote or if I can help in any way.

Here is the Fed statement in full:

Information received since the Federal Open Market Committee met in September confirms that the pace of recovery in output and employment continues to be slow. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts continue to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have trended lower in recent quarters.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Sarah Bloom Raskin; Eric S. Rosengren; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.

Voting against the policy was Thomas M. Hoenig. Mr. Hoenig believed the risks of additional securities purchases outweighed the benefits. Mr. Hoenig also was concerned that this continued high level of monetary accommodation increased the risks of future financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages

Mortgage rates improved a little over the last week, and are now near the midpoint of the range they have traded in over the last month. The economic reports released last week pointed to some improvement in the economy (housing numbers were slightly better, consumer confidence was up and jobless claims improved), but the numbers weren’t enough to suggest that the economy was really making a turn for the better. In the markets, the economic reports are now just a side show. The main event is the Fed meeting and the announcement at the conclusion this week, which will tell their initial plans for quantitative easing. This program is a way for the Fed to pump more money into the economy to try and create some inflation (back to the target rate of 2%) and force banks to start lending and for businesses to start chasing higher yields than they could by keeping their funds in cash. This is their second go around with this plan. The first time helped drop mortgage rates from the mid 5s to below 4%. Rates have already dropped lower in anticipation of the announcement, so we will have to see how much rate improvement is already baked into these numbers, and if we see a buy on the rumor sell on the fact response once the policy is announced. The other big question is if this policy can even work? We are now in uncharted territory. Short term rates are already effectively at 0 (for the biggest banks), but with the banks needing to rebuild their reserve funds and lending standards extra tight, the money flow is slowed to a trickle. This new policy of quantitative easing is a gamble on the Fed’s part, but a gamble they need to take.

The other big news this week is the midterm elections. I’ve always thought it was appropriate that they held elections near Halloween. With all the scary commercials on TV the candidates come across as creepier than any witches or goblins you might encounter. This is expected to be a big year for the Republicans, and they are likely to win the House, and have a chance to take the Senate, too. All of this is, of course, due to anger over the sad state of the economy. I doubt that the economy would be much different no matter who was elected in 2008. We are dealing with a mess that took us decades to work up to, and the truth is, with out massive government intervention the situation could have been much worse. But that doesn’t change the fact that it is an ugly situation now and there are no signs that we are going to bounce back soon. The markets like the idea of the Republicans winning for two reasons. First, they are considered more business friendly and anti-regulation. Secondly, with Republicans holding at least one house in congress and a sitting Democratic President, any bills passed are unlikely to be signed, which means gridlock. The problems confronting our country are huge, but the chances of the two partiers coming together to actually get things done are slim. Gridlock may be the best we can hope for.

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. 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

*(Another option is to break your Jumbo loan into 2 parts a 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.)

** 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 Jumbos 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

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages