February 2011

Chicago Illinois Mortgage Rates Week in Review for the Week Ending 02/25/2011

The economic news released last week was mostly positive, but there are concerns on the horizon. The consumer confidence index rose to 70.4 last week, the highest level since February 2008. Durable goods orders came in 2.7% higher for January, and initial unemployment claims dropped by 22,000 to 391,000 for the week, a sign that companies are starting to hire again. Manufacturing growth in the Richmond and Kansas City Fed surveys also came in stronger than expected. On the other side, the GDP (Gross Domestic Product) for the 4th quarter of last year was revised down to 2.8% from 3.2%, largely due to cutbacks in state and local government spending. With austerity the new watchword, this trend is sure to continue. But the big news this week was what was happening in Libya. Over the last month the desire for freedom has spread like wildfire throughout the Arab world. Tunisia…

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FHA Monthly Insurance Premiums Going Up – Again

Here we go again. Following on the heels of Fannie Mae and Freddie Macs mortgage cost increase, as part of the new budget released this week the cost of an FHA mortgage is going up. Again. Last fall FHA tinkered with their fee structure, lowering their Up-Front Mortgage Insurance Premium (UF-MIP is usually added back and rolled into the mortgage) while increasing the annual premium, which is paid as part of your monthly payment. The new increase goes into effect in April and will raise the cost of buying with an FHA mortgage by .25% per year, or a total of 1.15% of the loan amount each year, divided by twelve. So if you are buying a $200,000 home with the minimum 3.5% down payment, this translates into an increase of about $40 in the monthly payment. An extra $40 per month is probably not enough to push most home…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 02/11/2011

Signs of optimism and Egypt were the big market movers in the mortgage bond market last week. Initial unemployment claims fell more than expected the prior week, which either means that the economy is really heating up, or that with big snow falls across the country, less people were able to make it in to file the paperwork. Retail sales were up and credit card balances have increased for the first time since June 2008, a sign that consumers are becoming more comfortable and possibly that the banks are easing a little. The University of Michigan consumer confidence index rose to 75.1, the highest level in the last 8 months. On the downside, the trade deficit increased, largely as a result of higher oil costs, and Corelogic released a report showing home prices slipping again in December. The markets were focused on Egypt for much of the week, and with…

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Chicago FHA Mortgages With Fico Credit Scores From 580 to 639 – Affordability is the Key

“How low of a credit score can I have and still be able to get a mortgage?” This is a question I hear almost every day. One of the frustrating things for many people trying to buy their first home, has been dealing with old credit problems. Some people consistently have problems with credit, and if you just don’t pay your bills on time (or at all) and if you don’t take credit seriously, buying a home and qualifying for a mortgage is probably not an option. But for many people their credit has been damaged due to isolated life events. Too many people have run into problems over the last few years, often as a result of losing a job, medical issues or other traumatic events. For these people, the real frustrating part is that once their lives are back on track and they are back to paying their…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 02/06/2011

Mortgage rates had been in a holding pattern over the last month as the market considered which direction to run in. But last week mortgage bonds fell through the range, sending mortgage rates sharply higher. The news over the last month has been mixed, and open to interpretation about whether the economy is really improving or if this is just a head fake in a positive direction, while the economy remains distressed. Part of the issue is that we are exploring uncharted waters in economic theory. The two big problems in the economy are the housing market and the high rate of unemployment. The Fed sees these issues as signs of deflation, and has pumped a steady stream of new money (QE2) into the economy to try and lower rates to put some life back in housing and to get the banks to lend again, which will create new jobs….

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Chicago Video Home Buyers Guide – Mortgage Pre-Qualification and Pre-Approval

In this installment of the Chicago Video Home Buyers Guide, we talk about what is involved with starting a mortgage pre-approval. Getting approved for a mortgage is the first step in buying a home. Knowing Mortgage pre-qualification and mortgage pre-approval how much of a payment you can afford, and how much cash you will need to close allows you to set your sites on a home that is within your price range and your budget. Mortgage guidelines have tightened over the last few years, and knowing what is involved, and what you can do to put yourself in the best position, can make the difference between being able to buy a new home, and continuing to rent. As part of a free mortgage pre-approval, a good loan officer will not only tell you what you can afford and what the best way to buy will be, but can also offer…

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