This is beginning to sound like a broken record, but in a short Holiday week the attention is still focused on the situation in Europe. Belgium, one of the stronger economies in the European Union, had its credit rating cut last week, and an auction of German debt, considered nearly as safe as US debt, went badly on Friday. The consensus is that that a default from Greece or Italy is likely, and there is still nothing in place to hold the union together if this happens. The latest date to watch is December 9th, the next scheduled meeting of the European Debt Summit. In the mean time, the markets are still optimistic that a solution will come through. Rumors of a big bailout for Italy were quickly shot down, but hope is still in the air that something will take hold before disaster sets in. If anything happens in Europe this week, this will surely move the markets here.

Domestically the economy is still in the muddle through mode. Most of the economic reports show slow and gradual improvement, though this may not feel this way for most people. Inflation readings this week came in tame, with little risk of upward pressure in prices. The weekly average unemployment numbers are hovering just below 400,000, the best reading since April and a measure that while the job market is still weak, it is better than it was. As expected, the Congressional Super Committee failed to come up with any solution at all, but partisan gridlock will kick in the automatic spending cuts at the beginning of 2013, and with an election in between, the markets treated this as a non-event. The early returns from Black Friday, the start of the Christmas shopping season, were up. The real numbers won’t come back until next week, and it is hard to know if the bargain hunting now is a real indication of how consumers will spend throughout the season.

Mortgage bonds and mortgage rates are still in the same range they were in last week, but with optimism in the stock markets, rates the trend is moving toward slightly higher rates. Volatility is still extremely high, so this could change in either direction very quickly. We are still waiting for more clarification on the new HARP refinance guidelines. The program officially starts later this week, and all the lenders are still holding their cards close, so we still don’t know how they will treat this and what additional requirements they will place on the loans. We also don’t know what the pricing will look like since these loans will be sold into separate pools of mortgage securities.  Time is running low, so I expect we will know more later this 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 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

This promises to be an interesting week coming up, as volatility is increasing, and traders here in the US will have a short week due to Thanksgiving. You won’t be surprised to hear that Europe is still the focus of the markets. First it was Europe, then Spain and Italy took the spotlight, now it may be France’s turn, which is a much bigger problem. French bond yields are exploding and Moodys debt rating service may down grade their debt this week. Whatever happens there will surely be felt over here, and this is still the prime mover of mortgage rates. Mortgage bonds last week were all over the board, but ended the week just slightly off from where they began. Mortgage rates are about the same. from last week.

If you take Europe out of the mix, the economy here in the United States is actually improving. Initial unemployment claims last week were at their lowest point since April, continuing an improving trend. Industrial production came in higher and retail sales also rose .5% over October and up 7.9% compared to this same time last year. If slow and steady wins the race, we are at least moving in the right direction. One stumbling block to be cleared this week will be how the markets react to the Congressional Super Committee debt reduction plan, or rather their lack of a plan. This Super Committee, evenly made up of Republicans and Democrats, was tasked with reducing the debt by at least $1.4 trillion over the next ten years. Because congress itself wasn’t able to make any progress with this, they put a guillotine over the committee’s heads, so that if a plan isn’t agreed to, major cuts will automatically set in, geared toward hurting spending programs favored by both sides. But our system is largely broken, and even with big incentives to make this work, it has been leaked that the results will be no plan at all. The sticking point seems to be taxes. Republicans were against any tax hike of any kind (though they did have some revenue increases they offered) and Democrats were unwilling to make deep slashes in entitlements without corresponding tax increases. So the guillotine will drop, but conveniently, it doesn’t fall until January of 2012, and their is an election in between. Now it comes down to the election. If Obama and the Democrats win, the Bush tax cuts will expire and this will mean a big reduction of the debt on its own. If Republicans win, expect deep slashes in spending once they take over. The question now is whether the markets will wait to see what happens, or if they will react to this failure now.

In one great piece of real estate news, the high cost FHA loan limits were restored. This bill was passed by congress and signed into law on Thursday. This means that more homes on the upper price limits will now be available for low down payment FHA financing. The HUD site hasn’t been updated yet, but this will mean that the single family limit here in the Chicago area will be raised back to $410,000, from where it was at $365,700. This means a big jump in purchasing power for borrowers who needed or preferred FHA financing, and a boost for the housing market.

The new HARP refinance guidelines were released last week, but we are still missing two pieces of the puzzle.  This program is a reboot of an earlier program designed to help homeowners who are still current on their mortgages though their homes have lost value. This new version of the program allows borrowers to refinance, even if they are deep under water, that is, they have considerable negative equity in their homes. The program as written will help a lot of homeowners, but the two things we are still waiting for may make this program less beneficial for some. First, we are still waiting for the lenders interpretation of how to run this program. In the first version the government allowed the refinance for borrowers whose mortgages were up to 125% of their value, or 25% below water level. But most lenders wouldn’t go that high. The new version takes away much of the lender’s risk by waiving the normal warranties that are part of the agreement when the lender sells the mortgage to Fannie Mae or Freddie Mac. Still, their is a big chance that they will water down the program to make sure they don’t take on additional risk with these new loans. The other thing we are waiting for is the pricing. These are a whole new class of mortgage bonds, and as such, they will be priced higher. Until we know how much higher they will be priced, it is impossible to know how many people will actually be able to benefit from this program. The program officially starts on December 1st, so we should have answers to these questions soon.

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

News from Europe continues to drive the market. Greece is old news and Italy has bought some time now that Prime Minister Berlusconi has resigned. But Spanish bond yields are now hitting new highs which means that Spain may be the next point of concern. As one crisis is defused another inevitably pops up. This has been described as the Whack a Mole crisis, based on the arcade game where as you hit one mole with a hammer and another pops up on another part of the board. Just because the spotlight has moved away from Italy and Greece this doesn’t meant that their economies are back on track and their problems are cured. It means that they have taken action to diffuse the immediate problem, while the underlying issues still remain. The big problem is that the European Union is broken into the economies that produced more than they spent (Germany is the prime example) and those that consumed more than they produced (Greece, Italy, Spain and others), and that there is no central bank to make decisions for the entire Union. The strategy which benefits one side would punish the other. So this crisis is likely to continue to simmer until something forces a decision. This matters here in the US because the global economy is completely interlinked. Our big banks have loans outstanding throughout Europe, and our industry exports to Europe. If Europe falls we will feel the ripples.

This was a light week for US economic data, but the news released was mostly positive. First-time jobless claims fell by 10,000 to 390,000. This was the best showing in the last seven months. The U.S. trade balance dropping to $43.1 billion in September from $44.9 billion the previous month, which was much better than expected. The University of Michigan Consumer Confidence survey rose to 64.2 from the last reading of 60.9, its best level in the last five months. The economy here is gradually improving, but the storm clouds from Europe over shadow everything. Another thing the markets are watching is the results of the Congressional Super Committee’s debt report. Because congress was deadlocked and Democrats and Republicans were miles apart on how to bring the budget deficit under control (massive cuts, tax increases or a combination), they handed responsibility off to a bi-partisan committee with the mission to put politics aside and come up with a viable solution. If the committee doesn’t come to an agreement, this will trigger automatic spending cuts and tax increases which will hurt both sides. The idea here is similar to that of MAD (mutually assured destruction) which has kept the world safe from nuclear war as the idea of using your weapon means your automatic destruction. It’s a good thing our political parties don’t have nuclear weapons as they would probably use them against one another. No one expects an agreement to come out, and the this may hurt the economy, and reverberate in the markets.

Mortgage rates continue to ride the roller coaster, and volatility remains at all time highs. The news of the day determines that day’s mortgage pricing, but we are still at all time lows. We are still in the same range as where we ended last week. This is the time to act, whether you are buying a new home or refinancing your current mortgage.

In real estate news, this is the week we are supposed to get the new Harp refinance rules. The Harp program is designed to allow homeowners who are current on their mortgage payment refinance their mortgages ito take advantage of the lower rates, even if their values are under water. The original program helped a lot of home owners, but not nearly as many as was needed, because the initial rules put limits on the values, and lenders then cut these limits even further. The first go around of this program helped only those who were already in the best positions. The new re-do of the program is supposed to cure these problems and open refinancing to all the responsible buyers who have been shut out up until now. This program only applies to loans that are held by Fannie Mae and Freddie Mac (though they are serviced by others, so you make your payments to some other bank or servicing company). We will have details this week and I will post them once I have a chance to read through them. The first applications can be taken as of December 1st. If you want some more information on whether this program will help you and fit your situation, give me a call.

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

That didn’t last long. Last week the consensus out of Europe was that a deal was in place where Greece would accept a new round of austerity, and the rest of Europe would pony up the cash to keep them solvent. This didn’t look like a long term solution, no one really knew where the money was going to come from. But the solution turned out to be much shorter than anyone expected, about one day, when Greece’s Prime Minister threw a curve by calling for a national referendum on the bail out plan. Greece is still trying to figure out how it can best get through this crisis, the problem is that Greece is just the first domino. If the first domino remains standing, they all stay up. If it starts to fall, look out, there is a whole line of countries set up and waiting. The focus now has shifted over to Italy, a much larger economy. This time band aids won’t do, and no one knows how to make the tourniquets work.  The whole global economy is tightly connected and what happens in Europe will be felt throughout the world. 

The other big story in the markets last week was the failure of MF Global, an old line trading group headed by former New Jersey Governor and Senator (and former head of Goldman Sachs) Jon Corzine. MF Global made some big bets on the debt of troubled European Bonds. The position was a bet that these countries would get bailed out, and the bonds would increase in value, and they made the bet with extremely high leverage. It amazes me that this is still possible. The leverage they used, 40 times as much borrowed funds as what they invested, is at the same level as what was going on with the financial melt down in 2008. When their position was made public, investors headed for the exit, and with extreme volatility the company couldn’t stand up to the margin calls. Someone will face criminal charges as a result of this, but it could have been much worse. The company went down without even talk of a bail out, and the market blipped, but didn’t crash. What happened here was similar to what happened   with the company Long term Capital Management (who Corzine also had close ties with) back in 1998, and that sent global markets spiraling down. The question is, how many other firms are out there making out sized bets with excessive leverage? My guess is that there are others in similar situations.

The biggest market mover each month in the bond and mortgage backed securities markets is usually the monthly jobs report. This month it had an affect, but with all eyes on Europe it was comparatively minor. A net of 80,000 jobs were added in October. The private sector added 104,000 new jobs, but cuts of 24,000 government jobs brought the number down. The two previous months were revised higher. The unemployment rate (which is based on a different survey) dropped down a notch to 9.0%. This wasn’t an awful report, but another indication that it will take us a long time to get through this mess. The economy has added 1.256 million total non-farm jobs so far this year, but we are still off over 6 million jobs since the start of the recession. Something needs to be done to encourage growth, but as we come into an election year, don’t expect any kind of political action to get this done. No compromise is possible as both political parties harden their positions.

Mortgage rates dropped sharply lower this week and we are back near all time lows. But for those expecting a drop into an even lower range, it may be a long wait. Every time we have hit these levels the market has reacted by bouncing higher. Volatility is crazy, and the markets are focused on events that are unpredictable. If you are buying a home or refinancing a mortgage and these rates will put you in a better position, it makes sense to take advantage of them now.

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