Mortgage rates improved last week as the the Fed announced that interest rates will remain “exceptionally low” through late 2014. The Fed does not control mortgage rates. What they do control is the short term rates, the Fed Funds rate and the Discount Rate, which the big banks can borrow at. The Fed has kept rates at a range of 0 – .25%, but effectively 0%. The Fed has a dual mandate, to keep inflation under control, and to encourage employment. With rates this low, inflation hawks have been screaming that we are bound to have high inflation soon. By their statement this week, the Fed is saying this isn’t the biggest concern now. The Fed is saying that the economy remains weak, and the threat of falling back into a recession is a bigger concern. Part of this is obviously what is happening domestically, and trying to give a shot to the housing market. But a big part of this is also a reaction to what is happening in Europe, and trying to inoculate the economy here from slipping further if Europe deteriorates further. Three years is a long time, and knowing that rates will remain low for this period gives investors and businesses confidence in planning. Again, the Fed doesn’t control mortgage rates, these are set by action in the Mortgage Backed Securities (MBS) markets. But the signal here is that mortgage rates are expected to remain in a low range for quite some time.

As usual, Europe is still a big concern, and Greece is again the focus. The end game for a Greek debt plan is fast approaching, and may occur this week. Germany tried to push through a measure which would allow the ECU to take control of how Greece taxed and spent money, which understandably didn’t go over well with the Greek government or people. Without those controls, there is nothing backing the debt obligations, but it is hard to imagine any sovereign nation giving up that power. The results of the Greek debt talks will either come to an agreement, which in effect will kick the can down the road a little further as no one really expects that they will be able to live up to the terms of the agreement, or will break down, causing new concerns. Regardless of what happens, there are other countries lined up with similar issues which will need to be addressed. The question is whether the problem can be solved at all through forced austerity, or whether they will need to do something to force more growth (which means more inflation).

The reports released here were within the range, but a little less optimistic than what has come out over the last few months. GDP came in a little softer than expected, and inventory build up was a big part of the number. If this inventory isn’t absorbed by the end users, we could see more contraction in the coming months. Unemployment claims also came in a little higher last week, bucking the trend of late. This week could be a blip, but over the last months the trend has been that the economy has steadily improved, though is still too slow to make a real dent in the employment picture. In his State of the Union speech, President Obama talked about a new program that would help any homeowner who is currently paying their mortgage. This is different than the expansion of the HARP refinance program which will kick in im March, and no one knows if this will ever materialize, or what the details will be. If you are in the market to buy a new home, or refinance your current mortgage, mortgage rates are at all time lows. These low rates mean that home buyers can afford more of a home payment than they could when rates were higher, and current home owners have the potential to save a lot.

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

The big news from last week came out of – you guessed it – Europe. On Friday, Standard and Poors, the same organization that down graded the US bonds (to no real effect) announced the lowering of credit ratings for the bonds of nine European countries, including the second largest economy, France. This wasn’t a total surprise. S&P had hinted that they would do this a few weeks back, and bond yields throughout the continent have steadily been moving higher. But once they made it official more money poured out of Europe and into the relative safety of US bonds, and as a side benefit, mortgage bonds. The European Union is meeting for more economic discussions in about two weeks, and we are likely to see more fireworks then. Greece, whose problems were the first to show up, is not dealing well with its forced austerity, and there is a split among the economic powers of how to deal with this. If they push too hard they are likely to give Greece (and others) reason to break away, but if they are too accommodating this encourages more problems. There are no easy solutions, and this could take a long time to unravel. If problems heat up, the flight to quality will mean a push toward lower rates here.

Over the last months the economic reports here in the US have been trending better. That wasn’t the case last week. Retail sales figures for the Christmas season were released last week, and they came in weaker than expected. Retail sales for December increased .01% over November, when expectations were for an increase of .04%. The Christmas shopping season is a measure of confidence, and this shows that consumers are still feeling strapped. Weekly unemployment claims moved up by 24,000, but this is a blip in a trendline which has been improving. On the good side, consumer sentiment increased from a reading of 69.9 up to 74.0. This is still a weak reading, but much better than expected.

Mortgage rates are hovering at all time lows, but its hard to see that we will go much lower from here. As part of the congressional agreement to extend unemployment benefits which passed at the end of the year, the cost of the extension is being made up with a surcharge to mortgage costs. This amounts to 25 basis points, which points to slightly higher mortgage costs (which is usually factored into the rate. Some lenders are putting it in all at once, others are gradually adding the cost in by a few basis points per day so it won’t seem so jolting. Refinances at this level are likely to pick up again, and mortgage lenders are likely to contol their pipelines by raising rates if they get more volume than they can handle. This is all a way of saying that rates are great, and they may not get a whole lot better unless something drastic happens in Europe. If you are buying a new home or looking to refinance and qualify under the current guidelines, there isn’t a lot of incentive to wait.

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

The monthly Unemployment report was released on Friday, and it came in better than expected with 200,000 jobs added in December, and the unemployment rate dropping from 8.7% to 8.5%. This is good news, and somewhat surprising as the rest of the world is going into a stall. The jobs report is usually the most watched report on the economic calendar, and good news like this would normally cause mortgage rates (and interest rates in general) to start moving higher. The reaction in the bond market Friday when the report was released was an initial increase in yield (which means higher rates), but this didn’t last more than a few minutes before the market turned and came back to the previous range. The stock market, which feeds on optimism, was also down, discounting the value of the jobs report. Though these numbers are the best we’ve seen since 2008, this is still a sign of a weak recovery. Economists say we need to be showing job gains of around 350,000 per month at this point in the recovery in order to regain lost jobs, and it takes about 120-150,000 new jobs each month just to run in place based on population growth and new entrants to the job market. But the bigger reason that the jobs report wasn’t embraced enthusiastically, was because of more problems in Europe.

It is now agreed that the European Union is back in recession, and the friction between the weak and the strong is still as high as ever. Bond yields in Greece, Spain and Italy spiked higher again last week, and there is more concern about the French banking industry. With the European economy a mess, the United States is looking better by comparison. There is no doubt that we are slowly improving here in the United States (besides the jobs report, the ISM index also came in better than expected), but the question now is if we can keep up this recovery if the rest of the world continues to fade?

The FED released a white paper last week calling for more government intervention in the housing market. Even as the economy starts to show signs of life, the housing market is still weak. Though existing home sales are turning up, there is virtually no market for new construction homes. This is normally a big section of the economy, and this means a lot of idle construction workers, as well as all the other support industries. There is still too high of a backlog of foreclosures and the system for disposing them is too slow and unpredictable. The FED, and several FED members, are now pushing for a more aggressive policy as a necessary part of getting the recovery back on track. A few things will be coming out soon which should help the housing market. The new HARP refi will be rolled all the way out in MArch, after they have finished upgrades to the automated software systems we approve the buyers through, and a new program for turning foreclosures into rental units is expected to be released soon.

The bottom line is that mortgage rates this week are holding steady, and just about the same as where they were a week ago. Mortgage rates are at all time lows, and if you are in the market to buy a home or refinance your mortgage, this is the time to act.

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

Happy New Year! As we slip into the new year we can see a lot of changes, yet so much remains similar to where we were at this time last year. At the beginning of the year the Fed had started a new policy of Quantitative easing, and the markets were convinced that they would overshoot, leading to an inflationary spiral. This sent the stock market higher, while Treasury bonds and mortgage rates went up. The projected inflation never took off. The readings now are right inline with what they were at the beginning of the year, though there have been spikes in food and fuel costs, the overall rate remains low. At the start of the year, the big concern was that the United States was losing ground to the rest of the world. Since then Japan’s economy was devastated by the one-two punch of an earthquake and a tsunami, from which it is still recovering. The Europe Union is doing a slow motion disintegration and it is generally agreed that they have now entered another recession. And China, the powerhouse economy throughout this mess, is now having its own problems and their economy is stalling. So with the rest of the world stumbling, the US has been the beneficiary. Even now, after the economic collapse, the United States is still seen as the safest port in the storm, and as the world struggled, money flowed into the US Treasury bonds, bringing interest rates down past the lows of last year. The economy has steadily improved, and the job market is getting better, though we still have a long way to go before we can feel that we are back on track. 

Though we are further along than we were at this time last year, too much remains the same. Here are some areas where we are stuck in time:

Housing – The housing market is still on the ropes, and most of the government programs designed to help have been ineffective. Mortgage servicers are improving with getting distressed properties back on the market, but there are still too many properties in default or foreclosure. This will be a problem as long as unemployment is high, and there is a chicken and the egg situation here, as it will be hard to get back to full employment when so many jobs in our normal economy are based on strength in the housing market. On the good side, with home prices down and mortgage rates low, homes are more affordable than they’ve been in decades. This is bringing new people in to buy their first home, and I expect this to be a big year for home sales. Still, there is too much inventory on the market, and very few new homes being built. We are probably bumping along the bottom, but we are likely to be in this mess for a few more years.

Banking – The biggest banks, those too big to fail, have actually gotten bigger since the financial crisis in 2008. The four biggest banks have increased their market share and now account for over 40% of the overall market. This is in large part due to Fed programs designed to help them build up their reserves so they wouldn’t crash and bring us all down. Smaller regional banks haven’t been able to take advantage of these programs, so many have gone out or are still teetering. The result is that the bigger banks are holding on to cash to rebuild, and many smaller banks don’t have the money to lend, so commercial loans are still hard to get. This is a big problem for the small and midsize businesses that need bank financing to grow, or to get them through the down cycle intact.

Employment – The unemployment rate is now trending down, and there have been new jobs created every month this year. This is a big improvement from where we were before, when massive job cuts were happening every month, but we are still stuck on a treadmill which is going to fast to keep up with. The rate of job creation needs to be much higher to catch up with all the jobs we lost over the last several years, and just to stay even with new people coming into the job market we need to have about 120,000 new jobs each month. If we can stay out of a recession the jobs market should gradually improve, but we are likely to be stuck in this range for a while yet.

The markets – Volatility in all markets is at an all time high. The stock market ended the year close to where it started, but there were some wild swings in between. It is now common for mortgage rates to change during the day, so a rate quoted in the morning, may not be valid by that afternoon. A lot of this volatility is due to uncertainty, and other parts are a result of computerized trading programs which magnify the swings.

Uncertainty still rules and this year promises more of the same. The biggest uncertainty going forward is whether we can keep on a growth track while Europe and the rest of the world are imploding. This being a Presidential election year, we should expect more noise and the stories from each camp will paint an entirely different picture (we are either on the road to recovery or on the brink of doom). On the good side, mortgage rates are phenomenal. If you can take advantage of these low rates, you should jump on it 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