Questions to ask to see if an Adjustable Rate Mortgage is the right choice for you:

How long do you think you will be in the home?  A lot of this has to do with where you are in life, and what you expect to happen in the future. Are you a single income now, but expect to have a spouse working down the road? Do you expect to out grow this home as your family grows? Do you expect to be transferred or are going to need to move out of the area at some point? Or maybe you are at the other end of the spectrum and have kids who are finishing up with school and are thinking about downsizing in the future. The key is that if you have a good understanding of your future needs, and you really don’t expect to be in the home past a certain point, an ARM may be the right choice.

Is your income steady, declining, or likely to go higher? Are you a single income now, but expect to have a spouse working down the road? Are you in a job where you know that your income will be higher as time goes by? If you feel confident that your income will rise, an adjustable could be a good way to go. On the other hand, if your income is likely to be topped out and you don’t expect raises of more than the cost of living in the future, you are better served by going with a fixed rate where you will know the payment is going to stay affordable, even if you are there longer than expected and interest rates jump.

Do you have extra money coming in that you can use to pay down the mortgage? I’ve worked with borrowers who get get bonus as a substantial amount of their compensation. If you are getting a smaller monthly payment, but a big check once or twice a year, it may be easier to keep the monthly payment small and then pay extra toward the mortgage when you get these big checks. ARMs fit in well here (Interest only mortgages are sometimes appropriate, too). Everyone’s circumstances are different. The best approach is to match your needs to the loan that is most appropriate for you.

What is your risk tolerance? Will you be able to sleep at night if rates do move higher? With mortgage rates at all time lows, we know that rates have to go up, the only question is when, and how much. If your circumstances change, and it looks like you will need to stay in the mortgage longer than you planned, is this going to add to your stress? There are safety features built in, but if you are still in the loan when the payment adjusts, it could be a big jump. You will have saved a lot of money up to that point, but unless you used the savings as part of an investment plan, you need to be ready for the higher payment. Consider your risk level and temperament before choosing an ARM. There are a lot of people who would benefit financially from and adjustable rate loan, who still are better off taking on a fixed rate loan.

The other thing to keep in mind when deciding which loan is right for you, is that the future doesn’t always turn out like we expect. There are a lot of homeowners now who are stuck in homes too small for their needs because they can’t afford to sell and buy a new home with the market conditions now. For most home buyers who took on ARMS years ago, their adjusted rates have fallen as the ARMs came due. That probably won’t happen in the future, but if you match up your real needs and an accurate estimate of what your situation will be over the years you plan to be in the home, an Adjustable Rate Mortgage can save you a lot.

Peter Thompson 630-479-6424       

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company

Mortgage rates have dropped to all time lows. What used to be looked at as super low interest rates (in the mid or even low 5s), are now considered high. You may be able to lower your payment by a lot, often with no closing costs. For homeowners that are able to take advantage of the lower rates, this can mean big savings over time. With home prices lower and tougher qualifying requirements, refinancing is tougher than it used to be. But there are still a number of mortgage programs which make it easier to refinance now. One of the easiest and most beneficial loans available is the FHA Streamline Refinance.

FHA Streamline Refinance Loans

The FHA Streamline Refinance loan program is only available if you already have an FHA mortgage on on your home (Refinancing into a new FHA loan can make sense for a lot of other reasons, including adding improvements to your home and being able to use cash out to consolidate debts, but for these you need to do a fully documented mortgage). The advantage of this loan is that you can take on the new lower rates with out having to go through the full qualifying process, you usually don’t need an appraisal (which is a major headache with refinances today) and we can often structure this so you aren’t paying any closing costs (we pay the closing costs with a slightly higher rate). You will need to have some cash at closing to set up the new escrow accounts (to pay for your property taxes and home owners insurance) but you will get whatever money is in your escrow account with your current lender back after closing, so it will end up as a wash. If you have enough equity in the home, you may be able to add the escrows into the loan amount and come to closing with no cash at all, but we would need a new appraisal for this to work.

Here are some of the basic requirements of an FHA streamlined refinance:

• The loan must be FHA insured and you have to have made at least 6 payments on the Loan. If the loan is less than a year old, you can’t have any 30 day or more late payments. If the loan is older you need to be up to date on the payments with no more than one late payment in the last 12 months.
• The refinance has to be for your benefit. We need to lower the payment by at least 5%.
• We need to verify that you have enough cash to close the loan (this means enough money in a bank account to pay for the new escrow account and any other cash you may need).
• We need to show that you are employed and have income coming in. We don’t need to do a full underwriting of your income.
• You may be able to change the loan program (if you have an adjustable rate loan you may be able to go to a fixed rate, and visa versa) but we need to make sure that there is a real benefit attached. If you want to shorten your loan term we may need to do a full qualification.
• You can add a spouse or some one else to title without having to go through the full approval process. If you want to delete a borrower we will need more documentation.

Here is the documentation I will usually need for an FHA Streamline Refinance:

• I will need several items from your closing package, including a copy of our HUD1 closing statement, the Note and it makes it easier if I have a copy of your application.
• A current paystub showing you are employed.
• A bank statement showing you have enough cash to close.
• Proof of your Social Security number – this can either be a copy of your social security card or your W2 from last year.
• A copy of your mortgage statement.
• The name and phone number of your insurance agent.

If you have an FHA loan now, this could be a great way to save money. Give me a call and in a short conversation I can let you know how this will work for you, and put together a written estimate.

Peter Thompson                              630-479-6424

Chicago FHA Mortgage Rates          First time home buyer loans

Chicago Mortgage Company

Free Mortgage Pre-approval

Good news for many short sale and foreclosure buyers, Congress passed and President Obama has now signed a bill to give homebuyers another three months to close on their home loans and receive tax credits up to $8,000 ($6,500 for move up buyers).

The original deadline was June 30th, 60 days after the contract date. This was plenty of time to close for those in a normal transaction, but for those buyers dealing with short sales or foreclosed properties, the timing of the close was out of their control. The banks who hold the mortgage on the distressed properties look at closing dates as suggestions, not firm time lines they are required to meet. So even when the bank has agreed to the price and terms, getting the home closed in a reasonable amount of time is often a struggle. That is the case for those transactions where the bank has already entered into the contract. A lot of short sales are ones where the buyer has a contract with the home owner subject to the bank’s approval, but the bank hasn’t come back with a response yet. For these buyers, even the extra 3 month’s may not be enough. Short sales can mean big bargains, but there is no way to get the bank who holds the mortgage to move faster than they have to.

The big question now is what will happen to the housing market now that the tax credits have gone away? Last month, the first month after the credit expired, home sales dropped by 30%. This isn’t surprising, as many buyers picked up their pace to take advantage of the free money from the government. Now that this over, I am still seeing a lot of new buyers coming into the market, but they aren’t in a hurry to buy something right now. They are willing to taker their time and find the right home at the right price. Talking with many of the Realtors I work with, home sellers are starting to get more realistic about the market and I am hearing about a lot of price reductions. So the answer may be that prices fall a little further to make up for the loss of the credit. Mortgage rates are at all time lows, so for home shoppers who are still sitting on the fence, there are some incredible bargains (looking at not only price, but monthly payments). The extension of the tax credit is good news for many buyers, but for those who didn’t buy in time to take advantage of the credit, this could still work out to their advantage. But it won’t be because of the government incentives..

Peter Thompson                              630-479-6424

Illinois Mortgage Rates                   Fist time home buyer loans

Chicago Mortgage Refinance

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 660 Fico score, but loans are available with credit scores as low as 620. 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. 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

*A better option may be to break your Jumbo loan into 2 parts a conventional loan 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, especially for the lower end of the Jumbo range.

** 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.

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 a personal Quote for your situation

VA Veterans Administration 0 Down Loans

Call for information on no-cost VA Streamlined Refinances

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.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company

FHA may be about to change again. In a vote of 406-4, the House of Representatives passed a bill that, if passed by the Senate, will increase the monthly mortgage insurance for FHA loans.

Last year FHA raised their Up-front MIP requirement from 1.5% of the loan amount to 2.25% (again, financed into the loan). The new bill focuses on the monthly premium. This bill would allow FHA to increase the annual premium from the current .55% of the loan amount (divided by 12 and paid monthly) to a maximum of 1.5%. This nearly triples the amount they could collect, and if they put this in all at once, would be a major hardship for most borrowers. But it is more likely that they will tinker with the formula, lowering the Up-front premium and raising the annual, but not all the way to the limit. One combination that has been discussed, is lowering the Up-front MIP to 1% of the loan amount, and raising the annual to .90% (again, divided by 12). This approach gives a little on one side, while taking away on the other. An increase from the current .55% to .9% would result in about $30/mo on a $100,000 loan, while reducing the Up-front premium by $1,250. This may not be the intended result, but what this really does is make FHA more attractive for those who don’t plan on being in the property long term, and may make FHA a better alternative for some who would otherwise be able to finance with a conventional mortgage. I will have more analysis on this once we know how this will really shake out.

Nothing will happen until this bill passes through the Senate. No Senator has sponsored the bill yet, but based on the lopsided passage in the house, I have no doubt it will be coming soon. The higher payments will make it more expensive for some buyers, but this is a small price to pay to keep the FHA program on track. In order for the housing market to recover, FHA needs to stay healthy.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company

FHA is making changes to insure their long term survival and increase their reserve fund, and these changes mean it will be more expensive for home buyers. FHA has  been talking about these changes over the last several months, but now it is official. The biggest change is an increase in the Up-Front mortgage insurance FHA charges on every loan. FHA doesn’t make loans, they act as a mortgage insurance fund insuring lenders against loan losses through the mortgage insurance charged on each loan. FHA handles this in two ways, a small (compared to conventional mortgages) monthly charge, and a large chuck up front, which is usually financed into the loan. The up-front MIP (mortgage insurance premium) is currently 1.75%, but with this announcement it will soon increase to 2.25%.

The way this works, if a first time home buyer or other buyer buys a home at $100,000 with a minimum 3.5% down payment, they will have a mortgage of $96,500 plus the new Up -Front MIP (2.25%) of $2,171, so the actual mortgage will be based on the adjusted price of $98,671. If the interest rate on the mortgage is 5.25%, the mortgage payment would be about $545 per month, $21 more than the payment with the current premium . This change is due to go into effect this Spring.

The other major change is a reduction in the FHA allowed seller concession from 6% of the purchase price down to 3%. This brings FHA in line with conventional guidelines,. The seller concession is usually used to pay for the buyer’s closing costs, and allows buyers to buy a home with out having a lot of extra costs beyond their minimum down payment. This change won’t have much of an impact on most home buyers. Even in higher cost areas like Chicago (which has a high buyer paid transfer tax) 3% is enough to pay for most costs the buyer will take on. The people who this will affect the most, are those who are buying lower priced homes. If a first time home buyer is buying a $250,000 home with a 3% seller concession this is $7,500. If they are buying a $50,000 condo it is only $1,500, which when you figure in bank costs, title charges, attorneys fees transfer tax and the like, this won’t be nearly enough to cover the costs. So buyers of lower priced units will need to save more before they can buy. This change is not likely to happen until Summer.

Other changes include an increase in the minimum credit score required for FHA to 580, but almost all the lenders have already increased their FICO requirements to 620, so this should have little or no effect. FHA also announced that they will enhance monitoring to increase enforcement on FHA lenders to make sure they are adhering to all the rules and guidelines.

FHA still offers a 3.5% down payment and it still offers terms which are better for most first time home buyers, or anyone else who is buying with a lower down payment. These are all common sense guidelines, and though it will make financing a little more expensive, the health of the program for the long term makes this a good trade-off. But if you are a first time home buyer in the market to buy, this gives you one more reason (along with the $8,000 first time home buyer tax credit and record low mortgage rates) to buy now, instead of putting it off until later.

,Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Chicago Mortgage Company

Everything moves in cycles, and if the pendulum swings too far in one direction, you can be sure it will swing too far back in the other direction. The fog the mirror underwriting of a few years ago has been replaced by underwriting where you need everything but a blood sample in order to qualify. Conventional financing just got another round of tightening with the release next week of DU 8.0, and it looks like FHA’s time is coming up soon. There has been a lot of press lately about how FHA has gone below its 2% reserve level and that the program is in trouble. I think we need a little perspective here. It wasn’t FHA loans which caused the economy to blow up, and all the big banks, as well as the big GSEs (Fannie and Freddie), have already either been taken over by the government or are only around because they took government TARP money. FHA still has billions in reserve, and is still supporting the housing industry.  

HUD Chief Sean Donovan talked about the future of FHA the other week, and came up with some possible ways to grow the FHA reserve fund.

Some of the ideas mentioned included:

• Increasing the down payment from 3.5% to 5%.
• Minimum credit score standards.
• Increasing the up-front mortgage insurance premium from 1.75% to 2.25%.
• Lowering the amount that sellers can contribute toward closing costs from 6% of the sales price down to 3%.

I doubt if raising the down payment a bit would have much of an impact, and even though FHA doesn’t have minimum credit scores, all the lenders that administer the program already do. The other ideas may make more sense (especially if the up-front mortgage insurance increase is based on risk). There is a lot of political pressure to do something, but they could raise the down payment to 20% and require perfect credit and foreclosures will still be a problem if the unemployment rate stays high (this is the problem with conventional loans). Without FHA financing available the housing market would be in a lot worse shape. There has to be a balance between keeping the reserve fund high and still keeping mortgage funds available for the average home buyer. If they tweak the program too hard, home sales and home values will go down, which will cause greater problems to our fragile recovery

I expect that FHA will tighten in some ways (hopefully not too much), but even if they do, FHA mortgages will still be the go-to program for a good portion of the home buying public.

Here are some reasons FHA financing will continue to be the best financing option for many home buyers:

• With FHA the down payment and all the funds needed to close can be a gift.
• FHA still has a common sense approach to credit, and past credit problems are not an obstacle if you can show you have put the problems behind you.
• Under the new rules, FHA offers more flexibility with condominium financing allowing buyers to purchase with minimum down financing units that can’t even be financed conventionally.
• FHA qualification ratios are more flexible than conventional, allowing more buyers to qualify.
• FHA allows non-occupant co-borrowers, so income can be blended in order to qualify.
• FHA offers better pricing for most borrowers with less than a 700 credit score.
• FHA offers better pricing for condos (with less than 25% down payment) and 2-4 unit buildings.

The mission of FHA is to make it possible for more people to afford homes. They may tighten the requirements some, but if they make it too hard, they are defeating their stated purpose. FHA will still be the best loan choice for many home buyers.

Peter Thompson 630-479-6424

Illinois Mortgage Rates                   First time home buyer loans

Downers Grove Mortgage Company

We Lend in All 50 States

Mortgage qualification guidelines are getting tighter again as Fannie Mae (along with FHA and Freddie Mac, one of the 3 big buyers of loans in the mortgage  market) is about to roll out the newest version of their Automatic Underwriting System (AUS), DU 8.0.

A lot of the changes will be tweaking the formula, and some of the changes are taking away programs which all the lenders stopped doing ages ago. The new release does away with expanded approval loans (those with riskier profiles) and raises the minimum credit score from 580to 620. But in the real world, lenders haven’t accepted expanded approval loans in the last 2 years, and with all the price hits included, anyone with a score below 680 is likely to get better pricing with an FHA loan. There are other changes, like a reduction in mortgage insurance requirements, which will lower the cost of financing for some home owners.

The biggest change in the new release is a maximum debt ratio of 45% – or possibly 50% with strong compensating factors. The debt ratio is the total of the new mortgage payment and all your other debt payments divided by your income. The idea behind the debt ratio is to make sure you are able to afford the mortgage and not taking on too much debt. A borrower with a lot of money in the bank and high credit scores is a much safer risk than someone with lower scores and no reserves, so they should be allowed to manage a higher debt load. Back in the old days when I first started doing mortgages (and dinosaurs roamed the earth) the back end ratio was set at 36% for conventional loan, so the 45% (or 50%) isn’t awful. When they adopted the AUS system, much higher ratios were allowed because they were looking at the entire risk profile, not just one number. With strong borrowers it wasn’t unusual to get approvals when the total debt was well over 55% of the income we were showing (many borrowers have income coming in which we can’t use to qualify).  This change will  mean that a lot of well qualified buyers who are able to make their payments, won’t qualify for a Fannie Mae loan. Freddie Mac hasn’t announced that they are following through with similar changes, yet, so for now there are still conventional alternatives for borrowers affected by these changes.

With these changes, FHA is likely to increase their market share, again. FHA is in the same boat as its cousins Fannie and Freddie in that they are under pressure to increase their loan quality and up their reserves. FHA has already announced that they will be tightening their guidelines too, but because FHA financing was just a sliver of the market when the housing bubble was expanding, it doesn’t have the same level of problems that its conventional cousins do. Also, FHA is set up as a way to make financing affordable for more home buyers, so even as they tighten, they will still offer more opportunities to qualify. FHA has a stated back end ratio of 43%, but when run through the AUS much higher ratios are common. You are only hurting yourself if you buy more than you can afford, but there are so many situations where a one size fits all approach doesn’t apply. It’s good that is still an option. At least for now.

Illinois Mortgage Rates                   First time home buyer loans  

We Lend in All 50 States

Peter Thompson (630) 479-6424

With mortgage rates down near their all time lows again, refinancing is getting hotter (purchases, too). Low mortgage rates give you a chance to lock in the low rate for the long term, lower your payment and take some pressure off your budget. The rates now are the lowest I’ve ever seen and I expect when we look back at this a few years from now, they will seem like the bargain of a lifetime. But while rates are low, if you have compared rates you see in the newspaper or on-line, you might think rates are better than they really are. You might also see that some lenders are showing much lower rates than others, when the reality is that we all get our funds from the same sources, and the true rate shouldn’t vary from one lender to the next by more than an 1/8 or 1/4 of a percent.  So what gives? Why are some lenders able to show such low, low rates? Are they really able to do something that other mortgage lenders aren’t able to do?

The truth is, if it looks too good to be true, it probably is. Most consumers focus on the rate when comparing offers for their mortgage refinance, and mortgage marketers take advantage of this fact by advertising the lowest rates they can. But whether the lowest rate is the best deal for you is more complicated. The other thing you need to be aware of is how much the loan will cost you, and the lowest rates have the highest fees. We (mortgage bankers, brokers and banks) have a whole variety of rate and fee combinations we can offer every day. Each wholesale mortgage lender provides a matrix of price options every day. To get the lowest rate you will have to pay points (1% of the loan amount for each point, which is interest paid up front). I’ve seen Good Faith Estimates which show over 4 points (4% of the loan amount) charged to get a  below market rate. On the other hand, you can go in the other direction. The lender pays us (mortgage bankers, brokers and banks) extra money (called yield spread premium) for bringing in loans at higher rates. We can use this extra premium to pay off all your closing costs and give you a no cost refinance. Most borrowers elect to go with loans that have no points, or one point. The lenders don’t care how you do it, because they will get their money either now or in the future, and it works out the same to them based on their pricing models. For you, the consumer, it can make a big difference. So the big question is, what is the best way to refinance, paying extra money up front to get the lowest rate? Or does it make more sense to pay less money in fees upfront, but get a slightly higher rate?

 For a quick check to see if refinancing makes sense for you, and what the best way to refinance is, you need to consider 3 things:

How much will you save by refinancing?
How much will it cost to refinance?
How long do you expect to stay in the mortgage?

To find out the best option for you, you need to figure out your payback or break-even point. Let me work through the math to show you how this works (the rates and numbers here are all for illustration, not based on market rates now).

The first step is to determine, how much you will save?

For an example, let’s assume that you now have a mortgage with a $300,000 balance and a 5.50%% interest rate. This would give you a payment of $1,703 per month on a 30 year fixed rate loan. With improved rates, lest’s say you can now get the same  mortgage for 4.75% with a payment of $1,565 per month. This is a savings of $138 per month. That is a great rate and substantial savings. Does it make sense to refinance? Maybe, but we still need to know more.

The second step is, how much it will cost to refinance?

If you have spent any looking, you’ve found lots of ads for mortgage companies claiming they offer the lowest rates. But low rates don’t mean a thing if you don’t look at the closing costs too. Closing costs include title fees and the amount the bank charges to process the loan, which includes fees for credit reports, appraisals, processing and underwriting charges as well as Points (up-front interest). The cost can make a big difference for you. In the Chicago area it costs about $1,600 to close a refinance if you don’t pay any points or origination fees (another word for a point).  To see how the closing cost can make the difference, divide your monthly savings into the cost of refinancing ($1,600 divided by $138).  So in our example, it will take you less than a years worth of mortgage savings to pay off the up-front costs. Every month after that will be a true savings. If you are paying 2 points on the same loan ($6,000) plus the normal closing costs, ($7,600) the same loan will take almost 5 years before you would have any benefits from refinancing. The rate should be lower if the costs are higher, but you need to run the numbers on each to see which is the better deal. But there is still one more step.So the lowest rate isn’t always the best deal.

The third step is to estimate, how long do you expect to be in the mortgage?

With interest rates as low as they are, it may make sense to pay extra to lock in the long term savings. But if there is any chance that you may move, the savings may be wasted. In the above example, even if the rate is much better, if it takes 5 years to pay off the closing costs and you sell your home in 6 years, you wasted a lot of money on a refinance. On the other hand, if you stay in your home a full 30 years, you have made a lot of extra savings by paying more up-front to get the lowest rate. The thing to remember is that one size doesn’t fit all, and you need to go with the program that best fits your needs. Most mortgages last 7 years or less (before the homes are either sold or refinanced) so paying higher costs is not always the best deal. 

The idea that the lowest rate is the best deal can be a big problem. When you are comparing interest rate options, make sure that you compare apples to apples and not comparing a quote with points to one without. Pick the option that works for your needs, and don’t over pay to get a low rate if it costs you more in the long run. And make sure you get it in writing. Every lender should be able to give you a written Good Faith Estimate showing how much it will cost to close your loan, and how long your rate will be locked in for (make sure they are able to process your loan during their lock period). This is shaping up to be a great time to refinance, but you need to understand your options. If you would like a quote for a refinance that works best for your situation, give me a call.

Illinois Mortgage Rates                   First time home buyer loans               

We Lend in All 50 States

Mortgage rates are still holding near the lowest rates of the year. These low rates are compounding the experts. The stock market shows signs of faltering, but it is still up near the highs for the year. Oil and gold have had major run ups, and the dollar keeps getting smacked around on the currency market. The government holds new auctions for debt nearly every week and the money supply continues to grow. The economy is still soft, but we are long past the panic and slowly moving forward. At the same time, the Fed is nearing the end of its commitment to buy mortgage backed securities to keep rates low (the Fed has purchased over $1 trillion out of $1.25 trillion promised). All these are usually signs that inflation is heating up, and that mortgage rates should be rising. But rates stayed flat this week, near the lows of the year. What gives?

I think Fed Chairman Ben Bernanke summed it all up in a speech he gave last Monday on the outlook for the economy. In the speech he said that the improvement in the economy is real, but there are some serious issues that need to be addressed going forward, and the recovery won’t be a strong one. As problems, he singled out the lack of credit and how banks are still not lending like they should, and how high unemployment will continue to hold the recovery back. Inflation is likely to be subdued for some time, he said, because of excess slack (more supply than demand) in the world economy. Inflation isn’t likely to be a threat until these factors stabilize. The way I see this, when the credit bubble popped, the economy imploded and left us in at the bottom of a big hole. We need to fill in the hole before worrying about how high of a hill we are building. If the Fed continues to keep short term rates low (which they said they will) mortgage rates should stay in a low range, too. We all know that rates will rise sometime, and when this happens it will likely be quick and brutal. But for now rates are great, and I expect we will stay in a good range (but probably not as good as where we are now) for a good part of the new year.

With Thanksgiving on Thursday, this is a short week for the markets. Most of the activity will be on Monday and Tuesday before traders leave early on Wednesday for the extra long week. Existing home sales, the GDP, and consumer confidence measures will all be released this week, as well as several new auctions of government debt. With the shortened week expect more volatility in mortgage rates. Let me know if I can help you with refinancing your current mortgage, or helping you with your loan when you buy a new home. The New Home Buyer Tax Credit extension is expected to keep the real estate market hopping throughout this winter. If you are looking for mortgage pre-approval anywhere in the country, give me a call and we can get the process started.

Here are the current 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. 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. 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’ll take the time to find the rate and program that is best for you:

Conventional loans up to $417,000

30 year fixed rate              4.875%         5.078% APR

15 Year fixed Rate             4.25%         4.367% APR

5-1 A.R.M.                         3.75%        3.867% APR

For Jumbo loans over $417,000

***************** SPECIAL JUMBO PRICING ****************

30 Year Fixed Rate*          5.875%        6.093%*

This 30 year fixed Jumbo is special pricing based on a purchase up to 75% LTV or a refinance to 70%, 680 or better Fico scores. Other restrictions may apply.

**************************************************************

7-1 A.R.M.                        4.875%         5.095% APR

(Another option is to break your Jumbo loan into 2 parts – 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.)

FHA LOANS – 3.5% down payment – FHA Maximum varies by County

With 1 point origination fee – 45 day lock

30 year fixed rate              4. 875%       5.369% APR

With no origination fee – 45 day lock

30 year fixed rate              5.125%      5.326% APR

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

Call for quotes on FHA 203K Rehab Loans

VA Veterans Administration 0 Down Loans

With 1 point origination fee – 45 day lock

30 Year Fixed Rate            5.25%       5.437%

Call for information on no-cost VA Streamlined Refinances

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.

Illinois Mortgage Rates                   First time home buyer loans

Downers Grove Mortgage Company

We Lend in All 50 States