Economic Trends

Making Income Changes While in the Process of Obtaining a Mortgage

                  What happens if you have to change jobs while you are in the middle of getting a mortgage? Lenders typically recommend that you do not make major changes if you are in the middle of trying to get a mortgage, because lenders look for continuity, and will have to re-verify information if major changes are made. However, many folks do not have a choice: sometimes a new opportunity comes up, or are forced to change jobs. The good news is that lenders can work with you, and use the new information (income, salary, etc.) from your new position for your qualifying. This process can be started with just an offer letter, so the terms (salary, start date, etc.) are known to get the process started. Typically, at least one pay stub will be required before closing to show that you have…

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What Mortgage Programs Are Available to Veterans?

If you’re a veteran or a disabled veteran, what special programs for buying a home are available to you? If you served your country, you can take advantage of the Veterans Administration Loan Program that allows you to get 0% down on a home loan. In addition, there are other benefits with a VA loan, which will be described below. Funding Fee When setting up a Veterans Administration loan, a funding fee is attached to the mortgage. VA loans do not require mortgage insurance, as with typical mortgages when you put less than 20% down. However, there is a one-time funding fee that is added back into the mortgage. The amount of the funding fee depends on whether you were active duty, or served in the National Guard. However, if you are a considered a disabled veteran, this funding fee is waived and can save you money up front. Real…

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Learn About the Illinois Assist Program

                  For first time home buyers, there is a great new program called the Illinois Assist Program. This program is great news for first-time buyers and is a grant that does not have to be paid back, which gives money back at closing towards your down payment and closing costs. If you qualify, you can get up to 5% of the loan amount back, which can be a huge amount. Qualifications for the Illinois Assist Program There are some strings attached – it is not available everywhere in Illinois, but is in a number of areas in the Chicago area: including Cook County, Kendall County, and a number of cities such as Naperville, Schaumburg, and Aurora. There are income caps for the buyer, but they are still relatively high so there is room for you to buy, and there is a cap…

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Renovation Loans: How Long to Close

How long does it take to close on a renovation loan? Many folks have heard horror stories on renovation loans, which often times can take 90 or 120 days to close. Realtors often discourage the use of renovation loans because they never close. However, renovation loans can close quickly when set up appropriately. Two main factors influence the amount of time renovation loans will take to close: making sure the loan officer gives good advice on an appropriate time schedule, and you doing your homework. When doing a renovation loan, you will go and find a property and get a contract on the home, and then determine what work needs to be done to the home. Once under contract, your list of repairs and upgrades needs to be priced out, which involves getting quotes from good contractors that will do the work. Coming up with a list of what work…

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Some green ways to efficiently boost up your home

When choosing home improvements to enhance your curb appeal to potential buyers instead of asking yourself who’s the fairest, try asking “Who’s the greenest?” In this day in age, home improvements that boost owner satisfaction and reduce your average utility costs will in turn make your home much more appealing to prospective buyers. As it turns out, buyers are actually willing to pay up to 10 percent more for new homes certified green, because of the long term savings that will come and in turn this is a better investment, according to the real estate report by Harvard University. Replacing older, less efficient doors and windows would be a great return on investment and sellers would recoup much of the initial cost of the improvement when they sell the home. Five eco-friendly, money saving, home improvements: 1) Solar Water Heater– Making the switch to a solar power heater can be…

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Housing and Debt Ratios: How Large of a Mortgage Do You Qualify For?

Ratios are a big factor in the size of the mortgage you qualify for. There are actually 2 ratios we look at. The first, the housing ratio, is a measure of your total housing cost compared to your monthly income. The housing figure includes all the normal monthly costs of owning a home: the principal and interest payment, the monthly taxes and insurance, mortgage insurance, and the association fee if it’s a condo or townhouse (we’ll get into this more, later). The second ratio is the total expense ratio. This measure includes not only your housing expenses, but all your other monthly debts, too. So this takes into account all your minimum credit card payments, car payments, student loans, any alimony or child support, and the like. (There are some obligations that you are required to pay, things like car insurance and day care for children, that don’t count in…

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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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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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When you’re a first time home buyer, there are so many reasons for owning a home:  the pride of having a place of your own, the need to establish roots, the joy of being able to have a place where you can express your own personality and style.  Buying a home lets you take control of your own home, a control you don’t have when you rent.  With mortgage rates at their lowest point so far this year, it’s a great time to review the financial benefits of owning a home.  Welcome to the first of a three-part series that covers the three main financial benefits to homeownership:  Principle Reduction, Appreciation, and Tax Advantages. Principle Reduction:  First of all, a quick explanation. With most mortgages, each payment is divided into two portions—principle and interest.  Interest is the amount the lender charges for the use of their money over the time…

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Economic Trends – Chicago Illinois Mortgage Rates Week in Review for the Week Ending 05/03/2013

While we have seen rate increases in the early part of 2013, the end of April showed record lows for the year so far. Finance reporters and rate strategists watch the economic trends, they are discussing a casino-like scenario where buyers are gambling to hold out for a better rate or lock in the current ones. To further assist the market, new mortgage delinquencies are at 6 year lows which should help to gently apply the brakes to the foreclosure situation that has kept home values at bay; although the effects will take a while to ripple through the system. There is still a major foreclosure buying opportunity in the marketplace. Estimates still have foreclosures representing over 40% of home sales here in the Chicagoland area, but the number is heading downward. Factors that cause light volatility in mortgage interest rates will continue for the near future. The jobless numbers…

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