A fact of life in the housing market today is that a substantial amount of the inventory for sale is made up of foreclosed homes and pre-foreclosed or short sale homes. One of the biggest issues for buyers of these properties is that the condition of the homes can range from move-in ready to ready to be knocked down, and a good portion of the homes available will need some work. Sometimes this work is required before anyone can even get the loan. Other times the home is in livable condition, but needs modernizing and upgrades before most buyers would consider it a place they would want to call home.

Usually the best and often only financing option for these homes is the FHA 203k renovation loan. This loan allows the buyer to buy a home and add the cost of repairs and improvements into the purchase price. Because this is an FHA loan, it only requires a 3.5% down payment, based on the total cost, and credit and qualification standards are not nearly as stringent as conventional requirements. Knowing how these loans work, and how you can use them, opens up properties that wouldn’t have looked like possibilities before as realistic homes for your buyers. This also gives another tool in the arsenal for listing agents with homes that are outdated or have problems that can be fixed with a little work.

Prospect Mortgage is holding an FHA 203k seminar for Realtors on April 7th, 2011 at the Carlisle Conference center in Lombard, IL from 1:00 to 5:00. This seminar will feature Prospect’s National 203k Manager, John Adams, a nationally renowned expert. I’ve heard John speak a number of times, and he not only knows the ins and outs of how to get more homes sold and closed in the real world, but he is tell it like it is speaker who talks about specific strategies that will help you in today’s market.

Some of what will be covered includes:

• How the FHA 203k works.
• When to use the streamline FHA 203k and when to use the consultant 203k.
• How to help your buyers stay on track so you can close quickly.
• How to increase your sales with the FHA 203k loan.
• What you can do to help position listings for quicker sale with the FHA 203k mortgage.
• Here are the details:

Prospect Mortgage FHA 203k Realtor Seminar

Time: Thursday, April 7th from 1:00 – 5:00 PM

Location: The Carlisle

435 East Butterfield Road

Lombard, IL 60148

As a bonus, a 3G IPad will be raffled off at the event. To register, give me a call (630-479-6424) or send me an email (peter.thompson@prospectmtg.com). If you can make it, this will be time well spent.

Free Home Buyers Guide

You can trust in us to get the job done right.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages

It is amazing how fast news can fade. Disasters grow stale after a few weeks and as the cable news stations move onto whatever seems fresher at the time, the implications of even the worst disasters seem less important when the story is considered old news. We are seeing some of this now with the aftermath of the earthquake/Tsunami in Japan and the outbreak of war in Libya. It will take a long time before we know the real impact of all the destruction in Japan. Many pundits are expecting a quick reconstruction in Japan. But with the nuclear damage still being determined, an aging population and the highest level of debt in the developed world, this is in no way a certainty. If Japan doesn’t recover quickly it is likely to shave some growth off of the world economy. The Mid East is still unstable, but it hasn’t gotten worse, so again, it fades in importance. The stock market recovered some of what it lost over the las t few weeks, and mortgage rates rose slightly as the flight to quality (money shifting from stocks to bonds) eased off. There is still a lot of uncertainty in the air. Expect mortgage rates to remain volatile.

In economic news released last week – Existing home sales fell 9.6% in February on a month to month comparison. The inventory of unsold homes is now at an 8.6-month supply up from a 7.5-month supply in January. New home sales fell again, too.Much of this is seasonal and related to the weather. The bigger surprise was that durable goods orders, those items expected to last three years or longer, fell by,9% in February. The previous month orders had surged 3.6%. On the plus side, initial unemployment claims fell for the week. The biggest report coming out this week is the monthly jobs report which will be released Friday morning. This typically moves mortgage interest rates more than any other economic report. The trend over the last several months has been that more jobs have been created, which has pressured rates higher. But again, this could be trumped by new headlines in the news.

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 580. 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 Current Quote – FHA 203k Rehab and Renovation loans are now available as 30 year fixed or 5-1 ARMs.

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.

Free Home Buyers Guide

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

If you are planning on buying your first home in Naperville, Oak Park, Elgin or South Holland, you may be able to save some extra money. In fact, you could save a lot of extra money if you fit the guidelines for the MCC (Mortgage credit certificate) program. MCCs are issued as part of a state bond program to make housing more affordable. Most communities turn their funds over to the stat and have IHDA (the Illinois Housing Development Agency) use the funds for their low down payment grant programs ( I will have more on that later). These communities keep the funds themselves so that eligible home buyers can take the MCCs which effectively lower the payment for their mortgage by $2,000 per year for every year they stay in the home and the mortgage.

The Mortgage Credit Certificate allows up to 20 percent of the mortgage interest (for a maximum of $2,000 each year) to be claimed as a credit against your federal taxes. You can change your withholding amount at work and get the benefit immediately by paying less tax each pay period, or you can get this as a tax refund at the end of the year. You have to apply for this mortgage when you apply for the loan to buy your home. This isn’t available for refinances. But it can be used with any type of mortgage including FHA, which only requires a 3.5% down Payment.

In order to qualify for this program you need to be a first time home buyer (or haven’t owned a home for at least 3 years). Because this program is designed to help low and moderate income earners afford to buy a home, there are income restrictions and a cap on the maximum price of the home. But the caps are high enough that many home buyers will qualify. In these areas the MCC is available as long as you don’t make more than $75,100 per year for a single or a family of 2, and if their are 3 or more you can earn up to $86,365 and still be able to qualify. The maximum size of a home is $349,020, which covers a lot of ground in this market.

So, for first time home buyers in Naperville,Oak Park, Elgin and South Holland, give me a call and I can give you more details and see if this would be a benefit for you, and a way to save money over the years you are in the loan.

Free Home Buyers Guide

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 good news is that there are real signs that the economy is getting better. The Philadelphia and New York Fed reports showed strength in manufacturing. Retail sales were up .1% for the month. Initial unemployment claims fell by 16,000 to 385,000 for the week, a sign that companies really are starting to hire new workers. Unemployment is still way too high, but this shows we are headed in the right direction. After finishing their meeting, the Fed also changed the wording on their report to show more optimism about the economy. Though they hedged their optimism somewhat, the statement said that the economic recovery appears to be on firmer footing and their are genuine improvements in the labor market. The Fed did bring up the concern about increasing oil and commodity prices, but their view is that long term inflation is not a threat (unless wages move higher, the higher prices will just slow down economic activity). So domestically the news is improving.

The bad news is that there is so much happening internationally and that has been the focus of the markets. The effects of the earthquake and tsunami in Japan, and the state of their nuclear power plants was the biggest story. The Japanese nuclear industry has been considered the model for safety, so the threat of a meltdown calls into question the safety of the entire industry. At any rate, the level of destruction is immense. I’ve heard some commentators talk about how this will be a boost to the global economy as Japan rebuilds, but Japan had the highest debt of the highest debt of the industrial countries before, so this means piling more debt on an already high level. This won’t be a simple solution. The other big news was in Libya. What looked like a quick win for the opposition, changed as Gadafhi took control with bombings and air power. With the UN resolution, a US and international No-Fly zone will be an equalizer, but it may be too late to turn the tide for a quick victory. The question now is if this morphs into another long term commitment. 

Mortgage rates improved at the beginning of the week, but got a little worse by the end of the week as optimism spread that the crisis’s were under control. Expect the front page to set the tone for mortgage rates this week, too.

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 580. 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 Current Quote – FHA 203k Rehab and Renovation loans are now available as 30 year fixed or 5-1 ARMs.

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.

Free Home Buyers Guide

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

In this installment of the Chicago Video Home Buyers Guide, we talk about credit, and what you need to know when getting a mortgage. With mortgage guidelines tightening, having good

credit is more important now than ever before. That being said, you don’t need to have perfect credit to

get a loan. But you do need to show that if you have had credit problems in the past, these problems are behind you and you have control of your credit now.

In this video I talk about fico scores and what goes into the credit score, and what you can do to improve your credit and raise your credit score. The truth is, you have more control over your credit than you may think. Even if you have had problems in the past, you can improve your credit profile over time.

Here are links to past articles which cover how credit scores are determined, what you can do to improve your credit and how to remove mistakes on your credit report.

How to understand and improve your credit score-part1

How to understand and improve your credit score-part2

How to understand and improve your credit score-part3

How to understand and improve your credit score-part4

If I can help in any way, please let me know.

Other videos in this series -

Pre-Qualification and Mortgage Pre-Approval

Equity build up – How you build value by paying down your mortgage

How leverage and home appreciation will build value over time

The tax benefits of owning your own home

You can trust in us to get the job done right.

Free- Home Buyer’s Guide

Free Mortgage Pre-approval

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company            Chicago FHA Mortgages

Mortgage bonds improved most of last week, based mostly on bad news internationally. Oil is still a major factor, and though the rebellion in Libya has stalled, protests are rolling throughout the Arab world. If oil prices continue to climb, this puts more pressure on US consumers. Europe is back in the news as the debt ratings for Greece and Spain were lowered again, and Ireland and Portugal are still on the ropes. Trouble in Europe makes the US look good in comparison. Evidence is now mounting that China’s economy is now slowing down, too. The biggest news from last week hasn’t really been absorbed by the markets, yet. The earthquake and Tsunami in Japan, the world’s third largest economy, will slow their economy more. The devastation has been enormous, and with problems at several nuclear plants, the long term effects will continue to ripple out in many directions. So, for now, the flight to quality means that investors will move to the comparable safety of Government bonds. Mortgage rates improved most of last week, but ended about the same level as they started the week.

 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 580. 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 Current Quote – FHA 203k Rehab and Renovation loans are now available as 30 year fixed or 5-1 ARMs.

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.

Free Home Buyers Guide

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

It is a simple fact. Buying a home and getting a mortgage today is much more complicated than it used to be. But in many ways, this is a good thing. A few years back it was a strong sellers market. There were more buyers than sellers and as soon as a new listing appeared in a neighborhood, there was already a line of people waiting to buy. Most homes, if they were in decent condition, received multiple offers to buy, and often sold above the asking price. At that time a good Realtor was someone who was connected to the Realtor community and knew who had the pocket listing that wasn’t on the market yet, so they could help their buyers find a property before it even made it to the Multiple Listing Service. On the mortgage side, nearly anyone with a pulse could get a mortgage, and there were loans available for anyone, regardless of credit, income or even if you had a job. It was too easy to buy a home and to get a mortgage then, but as we now know, this didn’t end well. Needless to say, a lot has changed since then.

The market is much more complicated now, but the flip side of this is that there are more opportunities. Home prices are down, and with so many foreclosures and pre-foreclosures (short sales) on the market you have more homes to choose from than ever before in my lifetime. It is the same on the mortgage side. It is harder to get a mortgage and we will need to make sure that you fit the guidelines and all the Is are dotted and Ts crossed before issuing a mortgage. But with rates near all time lows, and home affordability is the highest it has been in years, so the rewards are high for buying a home now. It makes a lot of sense for many people to buy a home now, but because it is more complicated you need to make sure that you work with experts who are able to advise you about the best ways to proceed and to guide you through to a smooth closing.

Assemble your team of experts

Your Realtor – Finding a good, experienced and knowledgeable Realtor who pays attention to your needs is a necessity now. But experience doesn’t just mean how many homes they have listed or how many homes they have sold. You need to ask your Realtor what her experience has been in today’s market. Does she work with short sales and foreclosures? What is her track record? Buying these properties isn’t for everyone, there are more complications involved and if you set your sites on a short sale it is likely to take longer and may never close. But these distressed properties are a big part of the market now, and you need to see if these are possibilities for you. A good Realtor will tell you all the options and let you know both the pros and cons of each, so you are able to make the right decision. A good Realtor does much more than just show you property. They handle many details and help keep the communication going which helps to insure a smooth transaction.

Your Loan officer – Before you even start seriously looking at homes, you should talk with a good loan officer and get pre-approved for a mortgage. There are still mortgage programs available which fit the needs for most home buyers now, and there is plenty of mortgage money available. But you need to work with someone who is up to date with the current market and regularly closes purchase loans (many loan officers do mostly refinances). The changes in the mortgage industry over the last few years have been astounding. Mortgage guidelines change on a regular basis and keeping up with everything is nearly a full time job. Before you choose a loan officer, talk with them and make sure you feel comfortable with their suggestions. Also, make sure you are comfortable with their communication. Do they make it clear with what your situation is and what you need to do to qualify for a loan and how much of a mortgage you can afford? Do they return emails and phone calls on a timely basis? Good communication throughout the process not only eliminates stress, but makes sure that the approval process moves smoothly and nothing falls between the cracks.

Your Attorney – Here is the Chicago area, the attorney is a key team member in a real estate transaction. In a way, a good real estate attorney is a form of insurance. In most cases, everything goes smoothly and the attorney’s main role is to review the contract at the beginning, protect you through the approval process and explain the documents you sign at the closing. But it is when something unexpected happens that the attorney really saves you money. These major problems don’t happen regularly, but when they do having a good real estate attorney on your side will not only save you money but will help you avoid major problems. Make sure your attorney specializes in real estate. If you get someone who isn’t familiar with real estate they may miss things that are common practice for someone who handles real estate closings regularly.

Putting together a team that you are comfortable with and that is working for you will make all the difference when you buy your home.

Free Home Buyers Guide

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