Mortgage rates improved again last week and are now at their lowest point in the last 6 months. The lower rates are due to more more evidence that the economy is softening, again, and as a  flight to safety in global funds as Greece is about to be bailed out, again. Unemployment claims were up again, the Fed regional reports all showed growth slowing, or in the case of the Richmond Fed, contracting, and the first quarter estimate of GDP was lowered for the second time. But the biggest impact on the markets last week was the situation in Greece. The European Union has been trying to keep their currency together with Band-Aids and duct tape. The problem is that the union is made up of some members with strong stable economies, like Germany, and others with high debt and declining prospects, of which Greece is in the forefront. Greece has already gotten one bailout last year, but it wasn’t enough and they are now looking for more help. The big problem here is that Greece is not alone. Portugal, Spain, Ireland and others are lined up for better terms down the road, too. It is likely that there will be some sort of program announced to help Greece this week. Whether it will be enough to fix the problem for the long term is more doubtful.

As mortgage rates drop again, the big question is, how much lower can they go? Over the last six months we have heard a lot about how inflation is just over the horizon. Oil prices have spiked sharply higher and all sorts of commodities including metals and food costs have increased, so that we are feeling a big pinch in our wallets. Congress is still playing chicken with the debt ceiling extension and our national debt is sky high. None of these factors are normally associated with low interest rates. On the other hand (and it seems there always is an other hand), unemployment is staying at a high level, and the housing market is still a mess. These factors normally push rates lower. But the biggest factor may be looking at where we are on a global perspective. Mortgage rates go hand in hand with treasury bond yields. Treasuries have been pounded over the last months as concern over quantitative easing has driven down the dollar in turn caused the spike in prices. The United States when viewed on it’s own has a host of problems, when viewed on a global perspective, it looks more attractive. There is an old saying that in the land of the blind, the one eyed man is king. When compared to Japan, which is dealing with the aftereffects of the earthquake and tsunami as well as a severe recession, and Europe, which many analysts view as a ticking time bomb, the US is still looked at as the high quality alternative. In order for rates to go lower, investors will have to agree to accept a very low yield, but in times of worry, safety comes first.

We don’t know how much lower mortgage rates can go, or how much lower these low rates can last. We do know that these are historically low rates though, and if you missed out on refinancing last time the rates dipped, or if you have been thinking about buying a home, this looks like the time to pull the trigger. The last times rates dropped all the experts were forecasting for even lower rates. Instead, mortgage rates ran up almost a full point and a half. If you could benefit from a mortgage refinance or are looking to buy a new home, give me a call and I will let you know what we can do to help.

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, including credit scores, property type, amount of down payment and a number of other factors. 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

The end of the world came and went last week, and we are still standing. The biggest economic concern remains tied to the state of European economy, and Greece is now at the edge and tipping, again. If Greece needs a renegotiated bailout, as expected, there are several other countries that will step back in line for another shot at getting it right. This means that the US, even with all of our economic problems, is the safest alternative, and the flight to safety trade has been in effect over the last week, keeping US treasury rates and by extension, mortgage rates low.

Most of the economic data released last week was soft. The Empire State and Philly Fed manufacturing surveys showed declining growth in May. Industrial production was lower, at least partly due to shortages from supply chain issues related to the earthquake in Japan. The housing market is still weak. Home starts decreased again last month. This is obviously bad news for the economy as it takes out all the jobs that are generated by new home production, but it also holds the key to an eventual recovery. With so few new homes being built now, the supply and demand is based almost entirely on existing homes. Right now there is still too much supply based on too many homes being built in the boom years, but as our population continues to grow and new people come into the job market, at some point supply will be absorbed by the increased demand. The key is finding a way to deal with all the foreclosures and distressed homes on the market. Foreclosure activity dropped to a 40 month low last month according to RealtyTrak, but this was mostly a result of delays in processing foreclosures rather than any real recovery in the housing market. But again, there are some silver linings among the dark clouds. This is a buyers market, and for buyers who are qualified and ready to buy  there are exceptional deals available, and affordability is high.

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, including credit scores, property type, amount of down payment and a number of other factors. 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

Last week, the market mostly treaded water with mortgage bonds moving up and down within a tight range. The problems in Europe are taking center stage again, as Ireland and Greece need more help, after their earlier bailouts. The weakness there means more money flows to the safety of United States bonds. Or at least that’s the way it is supposed to work. Right now a big complication is muddying the waters and increasing the market’s stress levels. It is expected that the United States will reach their debt ceiling on Monday night, and congress has to act to extend the limit, or most government spending will be automatically cut off. This isn’t a surprise, everyone has seen this coming for months, but politics doesn’t make for easy solutions, and the two parties are far from any lasting agreement on this matter. The spigot won’t be totally shut off when the ceiling is reached. The government will still be able to tap into some sources of funds like pension accounts for government workers, but this is only a temporary solution. The big issue is spending cuts, and how much to cut and when. The Republicans, especially the Tea Partiers who were elected this last election cycle, want drastic spending cuts now as a precondition of any deal to extend the debt ceiling. The Democrats say they want spending cuts too, but not as drastic and they think that they can be held off until the economy is on stronger ground. If nothing is done this will mean major disruptions for the markets, and a loss in faith for the US system. Some deal is sure to be made, but the questions are when and at what cost?

The main reports released last week showed, again, that the economy was strengthening, but at a very slow rate. Initial claims for unemployment benefits fell by 44,000 to 434,000 for the week. Retail sales increased and consumer confidence came in slightly better than expected. On the down side inflation is still a threat. Both the PPI (Producer Price Index) and the CPI (Consumer Price Index) increased, but most of this was a result of higher gas 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 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, including credit scores, property type, amount of down payment and a number of other factors. 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

There are times when perceptions shift, when what seemed so obvious before suddenly comes into doubt, and a new way of thinking takes hold. This appears to be happening with mortgage interest rates now. All this year the view has been that our economy has been growing and that it may be growing too fast, so inflation was taking hold and interest rates were sure to rise. This week the accepted view has shifted to a belief that our recovery has stalled, and that while inflation still may be a problem in the long term, prices have gotten ahead of themselves for now. If the economy is slowing, lower mortgage rates are more likely. Mortgage rates ended this last week at the best rates we have seen this year.

This shift in thinking has happened despite an employment report that came in better than expected. The jobs report is usually the most widely watched economic gauge for determining economic strength. Earlier in the week unemployment rates rose higher than expected, a sign that the jobs recovery was slowing down. The ISM index, which tracks the service sector of the economy, dropped from 57.3 in March to 52.8 in April, much worse than expected. Going into the employment report the mood had shifted and expectations were that the report would be a stinker. Employment came in better than expected with 244,000 new jobs created last month, though the unemployment rate (which is figured with a different basis) popped back up to 9.0%. This was a good report, but unemployment is still too high and there are way too many people who have been unemployed long term, or are getting by with part time and lower level jobs. But usually, if the jobs report comes in better than expected, this means a sell off in mortgage bonds and higher interest rates. There was a sell off in the morning, but by the end of the day mortgage bonds were back to where they were the day before, so the market shrugged off the better than expected job report as it now focuses on the structural problems we still have to face.

The related big news last week was a collapse in oil and commodity prices. The price of crude oil dropped from a high of $114.80 a barrel a week ago, to under $100 by the end of the week. The Standard and Poors GSCI Index of 24 raw materials fell by 11.5% in just five days. High commodity prices were a sign that inflation was heating up, and the trend has been in place since the announcement of the Fed’s QE2 program last fall. Now, with the quantitative easing program winding down and commodity prices falling, inflation fears are going onto the back burner. If inflation is truly falling, this supports lower mortgage rates. If you are buying a new home, or missed out on refinancing your mortgage last fall, the timing couldn’t be better.

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, including credit scores, property type, amount of down payment and a number of other factors. 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

One of the best kept secrets for many real estate agents, home buyers and investors, is the Homepath loan. This is a type of mortgage specifically for purchasing Fannie Mae foreclosed homes, and there are  some great advantages to buying with this program. These foreclosures are priced right from the start, you can buy with a low down payment (3% down for owner occupants and 15% down for investors) and there is no mortgage insurance. Now we have a new type of Homepath loan, the Homepath Renovation loan. This mortgage allows buyers to purchase a Fannie Mae foreclosure and add the cost of repairs and improvements into one loan, with one closing. The biggest problem when buying a foreclosure is often that the home needs work, either repairs immediately, or deferred maintenance. This mortgage is modeled after the Streamlined FHA 203k, and the Homepath Renovation loan allows you to add these repairs into your mortgage, and you can also include other improvements to make the home the way you want it to be.

Some of the features for this loan include:

• Available for eligible Fannie Mae foreclosures as listed on Homepath.com.
• 3% down payment available for owner occupied buyers.
• 15% down payment for investors (2 –4 units require a higher down payment).
• Available for 1-4 units, condos and townhomes.
• The mortgage is available as 30 year fixed, 15 year fixed and 5 year adjustable mortgages, so there is flexibility in how you can structure your financing.
• There is no mortgage insurance on these loans (There are however pricing adjustments for this. You can either build this into the rate or pay to buy for it at closing – you can use seller credits to pay for this.)
• You can ask for up to 6% of the sale price as a seller credit for owner occupants, and 2% is allowed for investors.
• Unlike the regular Homepath mortgage, a full “as-completed” appraisal is required.

Here are the steps of a Homepath renovation Mortgage from start through the completion of the work:

1. Find the property and choose your lender.
2. Decide exactly what work needs to be done, and work with your lender to come up with an estimate of how much it will cost.
3. Apply for the mortgage so we can get the credit approval as quickly as possible.
4. Get bids for the work that needs to be done, and pick the contractor you want to work with.
5. Have your contractor work with your lender to submit the contractor approval package and make sure the bids are put together correctly.
6. Once we have the credit approval and the contractors bid and package, we will order the appraisal (showing value after all the work is completed).
7. Once the appraisal is in, this, along with any other needed documentation, is submitted for the full loan approval.
8. You close on the loan and now own the home.
9. At Prospect, 5-7 business days after closing you will receive 50% of the funds so you can start the work (this comes in a check made out to you and the contractor).
10. The contractor must start the project within 30 days and must complete it within 6 months. 
11. When the work is completed the contractor signs a lien release, the borrower signs a statement showing the work has been completed and a final inspection and title update are done.
12. The balance of the funds are released in a two party check to the contractor and the borrower.
13. If there is any money left over after all the work is done it will be applied to the principal balance of the mortgage.

Homepath Renovation loans are a great way to buy a home and fix it up at the same time, but it is a very specialized loan. There are only a few lenders able to do them here in Illinois, my company, Prospect Mortgage is one of them. Make sure you work with a loan officer who is certified to work with renovation financing as there are a lot more moving parts and you want someone who can help you navigate through the approval process. Let me know what I can do to help you.

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

 One of the biggest fears in the mortgage bond market (which controls mortgage interest rates) over the last months, has been what will happen once the Fed ends their quantitative easing policy in June and stops buying bonds. The Fed has been the major buyer, and the fear is that without their buying support, rates were sure to go straight up. This week at the end of the Fed Open Market Committee meeting, Fed Chairman Ben Bernanke had a press conference, the first ever for this position, and made it clear that the Fed will stop buying bonds as planned at the end of June, in a sense taking the training wheels off and letting the economy and markets ride on their own. With the confirmation that the policy will end, mortgage rates have continued to improve. The markets are now looking at this as a positive, getting the Fed out of the way means they won’t be increasing the money supply and adding to our debt load, which has increased the threat of inflation down the road. Now we will see if the economy is strong enough to make it on its own.

The economic reports issued over the last week have been a mixed bag. Consumer confidence in April rose from 63.8 to 65.4 in March. Durable goods orders increased for the third month in a row, and consumer spending remains strong. But GDP ( the total output of our economy) dropped from 3.1% growth at the end of the fourth quarter of 2010 to 1.8% for this last quarter. Growth is still positive, but not the growth we need to significantly lower unemployment. New claims for unemployment were also higher this past week. The housing market is still the biggest drag on the economy. The Case Schiller index of home prices (a national composite) dropped another 3.3 points. Their measure for the Chicago market is that home prices here are off by 31.5% from the housing peak. The major factor here is the inventory of foreclosed and distressed properties on the market. Almost half the homes sold last month were either foreclosures or short sales. This is bad news if you have a house you are trying to sell, but for home buyers it means opportunity.

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, including credit scores, property type, amount of down payment and a number of other factors. 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