Illinois Mortgage Rates and News

Welcome to Illinois Mortgage Rates and News week in review for the week ending April 11th, my take on the week’s financial news and how it affected Illinois mortgage rates.

Over the last few months, the mortgage backed securities market has been extremely turbulent, moving back and forth in a wide range. This week we still had our ups and downs, but the range has narrowed. There were still a few days where wholesale lenders sent out intra-day re-prices, but overall this week was the flattest week we’ve seen in ages. We are sitting up near the top of the range for mortgage bonds, which means that mortgage interest rates are near the low point of the trading range. The question is, how long are we going to stay in these calm waters? Will we stay in this range, or are we about to break out of the range, either higher or lower?

The major mover in both stocks and bonds this week was the release of quarterly corporate earnings reports. The week started out with some rumors in the financial markets that the worst of the credit crunch was over. As one example, Washington Mutual, a big mortgage lender who has been hit hard by the credit crunch, was recapitalized with a $5 billion dollar cash infusion. This was looked at as a sign that good times were ahead and optimism reigned. But optimism can be a fickle thing in a soft economy. As companies released worse than expected earnings, the view switched back to concern that we still haven’t seen the end of the problems associated with the crunch. Washington Mutual did get their money, but later in the week they announced they were closing their wholesale mortgage division and many of their retail locations will be shuttered. The earnings releases were a mixed bag. Some corporations came in with better than expected numbers, but many were worse. The biggest surprise was the release Friday of corporate giant General Electric, the world’s second largest company. Their profit dropped 6% in the first quarter and they expect the whole year to be challenging. The mood in the markets turned from optimism at the beginning of the week to pessimism at the end.

In other news, initial jobless claims came in better than expected with 357,000 new claims compared to the 383,000 projected. But the 4 week average spiked higher, which means the job market is still in the dumps. A sure sign of a recession. The Consumer confidence index came in at a 26 year low. This is a sign that consumers are worried tapped out, and unlikely to pull any cash out for big purchases. Consumer spending has been the engine driving economic growth. This reading says that they are not about to pull out their wallets in order to rescue the economy. Another sign of a recession. The state of the economy and the housing situation has now become the biggest issue in the presidential campaign and in the halls of congress. Even John McCain, a free market Republican, has now insisted that the government get involved in a solution. It’s not clear what will come out of all this, but we are sure to see more plans to stimulate the economy and get the housing market on track.

As I have written before, with all the news on the economy pointing to a slowing economy, odds favor that when we do break out, it will mean that rates will drop lower. By all economic measures mortgage interest rates should be lower now than they are. The reason they aren’t is because the mortgage bond market is still broken. Investors still lack confidence in mortgage bonds, and mortgage wholesale lenders are holding back on their pricing to make up some of their losses. At the same time, rates are excellent now, and they may drop lower. If you are thinking about illinois mortgage refinance ? or are looking at houses and are ready to pre-qualify for a mortgage, let me know what I can do to help.

So how did all this activity affect mortgage rates? Again, relatively calm waters. Rates moved around but ended up close to where they were at the end of last week. Here is what Illinois mortgage rates look like today for an A+, full doc purchase on a 30 day rate lock, with 0 points, and no origination fee. The conventional loans 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 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 5.625% 5.746% APR

15 year fixed rate 5.25% 5.324% APR

5-1 A.R.M. 5.25% 5.324% APR

7-1 A.R.M. 5.625% 5.789% APR

For Jumbo loans over $417,000

30 year fixed rate* 6.50% 6.613% APR – Requires 20% down payment

(*We have one lender at 6.125% for a Jumbo fixed rate – if you meet their guidelines.)

7-1 A.R.M.* 5.625% 5.789% APR *there is a 1 year pre-payment penalty on this option.

FHA LOANS up to $410,000

With 1 point origination fee – 60 day lock

30 year fixed rate 5.50% 5.784% APR

With no origination fee – 60 day lock

30 year fixed rate 5.875% 6.246%

These are just a sampling of the mortgage rates available. Which option is best for you will depend on your own specific goals and needs. Next week retail sales will be released on Monday, and the expectations are for a bad number. The PPI and CPI, two big measures of inflation will also be released. This week has been calm, next week may be more choppy.

Illinois Mortgage Rates and News