Chicago Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending November 6th, 2009, my take on the week’s financial news and how it affected Chicago Illinois mortgage rates.

This was a big week for mortgage and real estate related news. This week we had a Fed Open Market Committee meeting, the President signed an extended and expanded Home Buyers Credit, and the unemployment numbers, the biggest market mover, were released. This meant a lot of fear and anticipation, and a greater share of market volatility for the week, but the end result was that mortgage rates trended lower.

There is always anxiety whenever the Fed meets. Once they release their statement at the end of the meeting, the market gurus all go over the wording of the statement looking for secret meanings or clues that point to any change in direction. The statement this time was nearly identical to those over the past year, and the key phrase was that the Fed expected to keep interest rates low for an extended period of time. The worry for the markets, both mortgage bond and stock, is that the massive government borrowing will lead to inflation and higher interest rates. The Fed view is that job loss and the implosion of values in real estate and other assets has made inflation a minimal threat. After the Fed announcement rates improved.

The monthly jobs report was dismal again. There were 190,000 jobs lost in October, and the unemployment rate ticked up to 10.2%, the highest rate since the early 80s. There were hints of good news in the report – the amount of jobs lost is less each month, and the jobs lost over the previous 2 months was revised lower. But even with those few bright spots, the news continues to be grim. The 10.2% rate is bad enough, but when the underemployed and those who have given up looking for a job are included the real number is over 17%. Mortgage bonds surged at the release of this report, and closed the week improved. Mortgage rates are in their best range, even though there is a lot of new government debt coming on the market through new auctions next week.

Over the last few weeks, Congress has been going over the provisions of the New Home Buyer Tax Credit extension. They made it official this week and President Obama signed the new bill into law on Friday. The new bill extends the date that borrowers will qualify for the credit through contracts dated up to April 30^th 2010, and allows up until the end of June to get financing and close. The new bill also expands the credit so that move up buyers who have owned and lived in their home for at least 3 of the last 5 years are now eligible. The credit for first time buyers remains at $8,000 (or 10% of the purchase price up to the $8,000 max) and $6,500 for move up home buyers (or 10% of the sales price maxed at $6,500). They also increased the income limits so that individual home buyers can now make up to $125,000 per year, and married couples can make up to $250,000.

This is good news for home buyers, and though I don’t see this making a big difference this year (home buying always goes down in December), it should make for a strong, and fast start for the market next year. The move up buyer credit will help some, but this is more a case of an added bonus than something that will really get homeowners to sell their homes and buy a new one. Too many homeowners have lost equity in their homes and aren’t able to take advantage of the offer, even though they may have outgrown their current home. Also, the first time home buyers in the market are usually looking for bargains, and they are concentrating on the foreclosures and short sales that are priced the lowest. If these homeowners can’t sell their homes, they won’t be able to move up to a new one. But for those who have equity and can, this is one more reason to take advantage of the low mortgage rates and low home prices available now. If you are looking to buy a new home, the first step is a Chicago mortgage pre-approval, 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              5.00%         5.168% APR

15 Year fixed Rate             4.375%        4.568% 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              5.00%      5.347% 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

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