Happy Halloween! These is plenty of news to be scared of. After months of turmoil, the European Union has now come to an agreement on how to get their house in order. Greek bonds will be written down by 50% and the Union will raise over 1 Trillion Euros of new debt to recapitalize the economy. Now comes the hard part, implementing the deal and making it work. This agreement takes the worst fears off the table for now, but many analysts don’t think this is the end of the crisis, but more of a pause in the action. The amount authorized may not be enough to cover the problem, and even if it is, we still don’t know how they will raise the money (will China come to the rescue?). There is still a big disconnect between the have and the have not nations, and every time something needs to change. it has to be agreed to by all 17 European Union member countries. This is sure to be an ongoing issue, but the markets will put this on the back burner as all the details get worked out.

The economic reports released over the last week were mostly positive. The Consumer Sentiment index moved up to 60.9 from the prior reading of 59.4, when it was expected to drop. The estimate for the Gross Domestic Product (GDP) was an increase of 2.5% growth in the 3rd quarter, still soft, but much better than the sluggish growth earlier in the year. Home sales were up and higher than expected, too. Stocks also had a good week, and this has been one of the best October’s ever in the stock market.

In housing, the big news was the announcement of a reworking of the HARP plan, also known as the Obama refinance plan, that will allow more under water home owners to be able to refinance to lower rates. If this is done right, it could make a big difference. There are an awful lot of home owners who have lost equity in their homes, but are trying to do the right thing. They continue to pay their mortgages on time. So far they have just released the general scope, but the details come out on November 15th and the first applications can be taken as of December 1st.

Rate trends for the coming week may be less dependent on Europe, with the focus on the Fed meeting results on Wednesday and the unemployment report on Friday. The economic reports have come in slightly better since the last meeting, but there shouldn’t be any major changes in Fed policy. The employment report is expected to be off again, but the markets are sure to position for expectations earlier in the week, and over react once the report comes out. This is sure to be a volatile week, even if there is no news out of Europe. Mortgage rates rose early in the week as the European plan came together, but improved by the end of the week. Even with the extreme volatility, mortgage rates are still near all time lows. Let me know if I can help in any way.

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 640 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

Earlier this week, President Obama announced a new plan to rework the HARP program designed to help more homeowners take advantage of low mortgage rates. The HARP program covers loans that were taken over by Fannie Mae (DU Refi Plus) and Freddie Mac (open Access). When the program was first rolled out, the idea was to allow homebuyers to refinance even if their homes had lost considerable value. The program was originally set to allow home owners to refinance based on their original mortgage terms, so if you had put 20% down when you first bought the home, the new loan would be treated as the same and you wouldn’t need to buy mortgage insurance, even if the value was much less now. Originally the program was set to that help even borrowers who were underwater, that is they owed more on their home than the property was worth, and the guidelines allowed up to 125% loan to value (negative equity of 25%). Unfortunately, this program worked better on paper than in real life. It worked great for the best borrowers, those who had lost value but still had some equity and had put down larger down payments originally. But it didn’t work as well for those who had second mortgages attached (many second mortgage lenders wouldn’t subordinate their loans, a necessity to refinance), and though the program went up to 125%, all the lenders put in their own overlays making it impossible for most borrowers to refinance if they didn’t have some equity in the home. As a result, the original program didn’t work any where near as well as intended, and many other wise well qualified home owners were left out in the cold.

This new version is designed to fix these problems and to help all the home owners who continue to make their mortgage payments even though their value has gone south. One of the main problems with the original plan was that Fannie and Freddie passed much of the risk on to the lenders through the representations and warranties written into their purchase agreements (most of the conventional loans are bought by Fannie or Freddie even if another lender handles the servicing or collecting the payments). The issue here is that if a loan went into default or some problem was discovered in the loan package, Fannie and Freddie could force the lender to “buy back” the loan. If a lender is forced to buy back a loan, this is an immediate loss. The fear of buy backs has been a big part of the tightening of approval guidelines over the last few years. This new version of HARP takes this off the table, and allows refinancing even if their value has declined beyond the 125% set in the first go around. So far we have the broad strokes of the program, but the details won’t be released until November 15th 2011. The first applications can be taken after December 1st. There are sure to be issues that have to be worked out, but this looks like it will help a lot of responsible home owners who owe more than their homes are worth take advantage of today’s record low interest rates.

Here are some of the changes with the new version of HARP:

1. Eliminating certain risk-based fees (price hits or loan level price adjustments) for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers.
2. Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac.
3. Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac.
4. Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises.
5. Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.

To Qualify, Borrowers must meet the following:

1. The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
2. The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
3. The mortgage cannot have been refinanced under HARP previously.
4. The current loan-to-value (LTV) ratio must be greater than 80%.
5. The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.

To see if your loan is held by Fannie Mae or Freddie Mac, here are the links to the look up tools:

FANNIE MAE LOOKUP

FREDDIE MAC LOOKUP

I will post more information on this program as it comes available.

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

If you listened to news reports last week, you would have heard that mortgage rates just dropped down to their lowest point ever (according to the survey 3.94% with .80 points). Unfortunately, the news reports are based on the Freddie Mac loan survey, and this survey is always a week behind. In the real world, mortgage rates rose sharply higher and ended the week at the highest point in over a month. Mortgage rates are still near all time lows, and chances are good that rates will drop lower again soon, but the volatility now is nothing short of awe inspiring. Mortgage rates are market driven, and mortgage backed securities move up and down based on traders expectations of the strength in the economy and the risk of inflation. Last week the optimists were out in force as the outlook in Europe improved, and economic data came in better than expected. The ISM manufacturing index increased a point to 51.6 in September, better than was expected and while not a robust number, it was positive. Car sales were up and mortgage delinquencies dropped to their lowest level since 2008. But the big news was the monthly unemployment report.

The jobs report is always the most anticipated report for those watching bonds and the direction of interest rates. This report showed an increase of 103,000 jobs in September, a slight revision higher for the two previous months and the unemployment rate (which is based on a different survey) remaining at 9.1%. This isn’t the kind of news to make people break out the Champaign and start singing Happy Days Are Here Again, but, again, it was better than expected. It takes about 150,000 new jobs each month just to run in place and keep up with new entrants in the job market, and the number of people long term unemployed is still way too high. But the big fear is that we are dipping down into a new recession (when most people thought we were still in the last one), so this report is more evidence that we are muddling through.

Europe is still the wild card. Greece is circling the drain, and Italy, Spain, Ireland and others are just behind. This week France and Germany agreed to do what is necessary to recapitalize the banks and bring stability to the European Union. They have given a deadline of the end of October to get the details of the plan together. This is obviously great news, and if they can stabilize the system it will take a big hunk of uncertainty out of the global economy. The problem is that this announcement has a feeling of Deja Vu – we have been here before. Over the last year there have been a number of times where it looked like Germany was going to come in to rescue the continent. And then things fell apart. Some economists doubt that this could work out, even if they all agree to it because the amount of money needed is just too much. But for now optimism prevails. Don’t be surprised if this doesn’t work out as planned, and the problems in Europe hit the front burner before the month is over.

Mortgage rates are off their lows, but still in all time low territory. If you are in the market for a mortgage, either buying a new home or refinancing your current home, you can still get a great rate. The key now is to have realistic expectations and patience. When rates dropped down to their all time lows, they stayed there for just over a day before starting the move higher. Timing the market and getting the best rate is tough to do. When the rates drop down the consensus is that they will continue dropping, but they often spike higher. If the rate works for you and your situation, take advantage of it. Let me know if I can 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 640 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