May 2011

Chicago Illinois Mortgage Rates Week in Review for the Week Ending 05/27/2011

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…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 05/20/2011

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…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 05/13/2011

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…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 05/06/2011

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…

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Chicago Area Homepath Renovation Loans – Financing for Purchase and Repairs for Fannie Mae Foreclosures

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…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 04/28/2011

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…

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