Opinions and Prognostications

Preparing to Buy: Dealing with Credit Problems

So what happens if your credit isn’t the best? If you’ve had major credit problems in the past, or if there is inaccurate information on your report, this may affect your ability to buy. Your situation depends on what the problem was, and how long ago it occurred. If the problem was from years ago, you might be surprised at what we can do. But even if it’s a more current problem, there are options. FHA, a government program, is more lenient of past credit mistakes, and can be a great option for many situations. We’ll discuss this in more detail later. It also depends on the specific circumstances of your situation.  Many people think that after a bankruptcy, for example, they won’t be able to buy a home again. But depending on the causes, you may be able to buy, at good rates, as soon as two years after…

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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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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 03/01/2013

Mortgage rates have steadily risen since the beginning of the year as signs showed the U.S. economy was growing, and the global economy had stabilized. A big part of the renewed optimism was the view that Europe was on the mend, and through selective austerity, the European Union would hold together and the status quo would survive. Well, what goes up comes back down, old is new again and Europe is back in the headlines. The focus now is Italy, and the election results last week showed that it may be a while before they find a true solution to the European economic crisis. In an upset of expectations, the biggest winner in the election was a comedian leading an anti-establishment party. The right and left wings split, and in Italy’s parliamentary system, it looks doubtful that anyone will be able to make alliances to form a working government. This…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 02/01/2013

The consensus in the markets now, is that the worst of the decline is behind us, and the economy is on the mend. The economic data last week was mixed. Reports showed that the overall US economy shrank in the last quarter of last year, the first time we have seen a fall in the last 3 years, with GDP coming in .1% lower than the previous quarter. But this was mostly a result of a drop in government spending, and private industry continues to grow. The Case Schiller home index shows housing prices are moving higher, consumer confidence came in strong and China came in with strong manufacturing  numbers, another indication that the global economy is better than expected. The Big Kahuna of reports is always the monthly jobs report, and this month showed an increase of 157,000 jobs, while the unemployment rate ticked a touch higher to 7.9%….

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 01/25/2013

Mortgage rates blipped sharply higher last week after a trifecta of optimism hit the market. One of the biggest reasons interest rates are so low, is because of fear that the European Union is, and has been, on the verge of collapse. To stave off the collapse the ECB, Europe’s version of the Fed, lent out cheap money to banks throughout the continent to maintain liquidity in the system. Last week they announced that more than half the banks participating in the program will be paying off the loans as soon as they are contractually able to (this week). That is much better than expected, and a sign that the overall economy is in much better shape than has been projected.Rates dropped into their lowest range when the markets expected that the European Union was about to collapse, so this good news is indeed bad news for the lower trend…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 01/11/2013

For a good part of last year, the financial markets moved up and down based on whatever was happening in Europe. The problems there aren’t fixed, but this has moved firmly to the backburner as all the attention now is focused on our own political issues. We have been muddling along and the US economy has been slowly but steadily improving, and unemployment has slowly but steadily been dropping. The biggest crises we have now seem to be of our own making. We came into the New Year courting disaster, and ground the brakes down to dust as we stopped just short of the fiscal cliff. The agreement didn’t really end anything though, it just forced a break in the action so the two political parties could re-group for the next battle. For our next crisis, we are bumping up against the debt ceiling again and this will have to…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 12/29/2012

Happy New Year! Buckle up, it looks like we are going cliff diving. The two parties in Washington are holding hands, Thelma and Louise style, and punching down on the accelerator as they go over, saying goodbye to 2012. Do you ever wonder how much better our economy would be if it wasn’t held back by a completely dysfunctional government? This latest crisis is almost exactly mirroring what happened a year and a half back when the congress and president couldn’t come to an agreement on raising the debt ceiling on time, and as a result Standard and Poors lowered the US credit rating. The good news then was that the investing world ignored the rating drop, US bonds are still considered the safest in the world and rates have dropped sharply since then. The good news now is that even though we are almost surely going over, this is…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 07/14/2012

In the mortgage industry, the big news last week was the Fed announcement that they will be extending their quantitative easing program and placing economic benchmarks to replace their previous time table. With the announcement, the Fed committed to an additional $45 billion dollars of treasury and mortgage bond purchases each month. The goal of this program is to drive rates lower so that there is a bigger incentive to invest money since the yield is so low. The bigger change was that the dates the program was in effect for have been removed and replaced with specific performance benchmarks. The program will continue until unemployment drops to 6.5%, or on the flip side, inflation moves up to 2.5%. This is the firs time the Fed has given specific guidance to unemployment rates, and they are saying that they are willing to put up with a little extra risk of…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 11/30/2012

If you have watched the financial news over the last few weeks, you probably get a tinge of anxiety every time you hear the phrase “Fiscal Cliff”. The markets for Treasuries and mortgage bonds moved back and forth over the last week based on each rumor and news clip relating to who had the cards and what was going to be done politically to forge a solution in time. The phrase does sound ominous, and with grid lock built into the system in Washington, the odds of the Republicans and Democrats coming together on a compromise solution before the beginning of the year seems slim, so what will happen if we do go over this cliff? In reality probably not that much, at least at first. The biggest thing that will happen automatically, is that tax rates will rise for everyone after January 1st as the Bush tax cut hits…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 11/16/2012

The mortgage backed securities markets went up and down like a yoyo this week, but in the end, despite all the movement, mortgage rates are stable and at about the same level as the week before. The election is over which brings some stability to the markets, but there are still a lot of unknowns, which means uncertainty is still the major vibe. The US economy has been improving, but the reports moving forward are going to be skewed for a while as the impact from Hurricane Sandy is felt. All the devastation will mean a drop in jobs, production and economic activity at first, and then a spike as the cleanup and rehab takes over. The focus now moves to concern over how we will make it past the fiscal cliff, and what will become of the rest of the world. The fiscal cliff is scary, and our government…

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