June 2013

What Is Happening To Mortgage Rates?

Over the last month mortgage rates have moved steadily higher, and over the last week rates have spiked to the highest point in the last 2 years. For most of the last year rates have been stable and hovering around 3.5% (before pricing adjustments). This has been a result of the Fed’s program to buy mortgage backed securities (which determine mortgage interest rates) as a way to stimulate the economy by driving down mortgage rates. The concern has always been:  What will happen when the Fed pulls out of the market? The experts have expected that rates will go up over time, but that the rise would be gradual. Rates moved higher over the last month when the Fed indicated that the economy was growing at a good pace, and they expected to start tapering off of the stimulus program by the end of the year. This last Wednesday, Fed…

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Applying For A Mortgage: Credit Qualifying

When qualifying someone for a mortgage, I look at it as a game of twenty questions. I need to get as much information about you and your finances as possible to make sure we find the best loan program for you. A good loan officer should be a trusted advisor who takes more into account than just how much of a loan you can qualify for. The mortgage you choose has to fit your life style and future goals, as well as your current financial situation. The whole idea behind the qualifying process is to measure the risk.  That is, to figure out how likely it is that a borrower will pay back the money they’re borrowing. I ask a lot of questions, but the qualifying issues all revolve around 3 areas:                                                  Credit                                                 Income                                                 Assets Your history in these 3 areas determines what type of loan you…

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The Home Buying Process – Pre-Qualification and Pre-Approval

You know that it makes sense to buy a home and that this is a good time to lock in on a mortgage rate, but how do you go about it? There are so many things to consider. What type of house do you want? What’s the best area to buy in, and what’s the best way to find a home? How do you negotiate the contract? What happens between the time you agree to buy the property and the closing? These are all good questions that you’ll need to make decisions on, but before you do anything else, you need to know how much of a house you can afford. This usually means finding out how much of a mortgage you can afford. Most realtors won’t even show you homes until you have talked with a loan officer. Pre-qualification and Pre-approval:  How much of a mortgage you can afford,…

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Economic Trends – Chicago Illinois Mortgage Rates Week In Review for the Week Ending 06/04/13

With a steady drop in home mortgage rates over the past year, owning a home has become a deal too good to pass up. Home prices have seen the sharpest gain in seven years and, once again, our neighborhoods are bustling with the sound of new construction. But the trend has changed sharply since the beginning of May with rates on a 30-year fixed mortgage going from 3.4% to 4.1%. Is this the end of the housing recovery? According to many mortgage analysts, we still have hope. Mortgage analysts at Goldman Sachs suggest that affordability is not what’s holding Americans back from buying houses but rather other factors that go into buying a home: credit standards, difficulty building up a down payment, and lack of confidence in job stability. Therefore, slight increases in mortgage rates shouldn’t slow the improving housing market. That’s because the improving economic trends that are causing…

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