Welcome to Illinois Mortgage Rates and News week in review for the week ending November 7th, my take on the week's financial news and how it affected Illinois mortgage rates.
The big news this week was the election. After what has seemed like an eternity it is finally over. Now we have a break from negative ads for about a year 
before the congressional races start again. But now with Obama as our new President Elect, there is a little less uncertainty out there and we at least know who our leader is going to be going forward. This has already helped stabilize the markets. The waiting game is now focused on who he will pick for Secretary of the Treasury and what he plans to do about the economy. He has already said that the first priority is to put together a new stimulus plan. The first stimulus plan where the government sent everyone checks was a complete bust. This stimulus plan is expected to be tied to increasing jobs and building infrastructure. The advantage of this approach is that at least we will have something to show for it once the money is spent.
The news on the economy continued to be bleak, but there are real signs that the credit crunch is easing. The Libor rate, which spiked to nearly 5% when the credit crunch hit in October, is now down in the low 2s. This is a big benefit for anyone who has an adjustable mortgage that is about to convert. Now the conversion rate is likely to be in the low 5s rather than above 7 like it was a month ago. Other indicators are also showing the panic lifting in the credit market, though banks are still holding onto money rather than lending it out. The TARP program, also known as the bank bailout, was put into place to recapitalize the big banks and get them to start loaning money again. It looks like their plans for now are to hold onto the cash or use it for buying new companies. I'm not sure how this will change, but it will need to in order for the economy to recover. Overseas the British and European central banks both cut rates. With global rates low and so much money being pumped into the economy, lending should pick up over time.
Like I said before, the other economic news was pretty bleak. Ford and GM announced quarterly losses of 2.5 to 3 billion dollars. GM is losing money at the rate of about a billion per month and they expect to run out of cash next year if it continues like it is. The auto industry will be the next big bailout. The employment report came in at a loss of 240,000 jobs, a downward revision on last month's report showing more jobs lost and the unemployment rate rising to 6.5%. Job losses are accelerating, so it is going to get worse before it gets better.
There is good news on mortgage rates. Mortgage bonds have been fluctuating wildly and rates had risen over the last month even as all the fundamental factors pointed toward lower rates. On election day the mortgage bond market went wild with a rally of 113 ticks, a vote of confidence in the end of election season and knowing someone new will be in charge. Rates were off a little at the end of the week, in spite of the employment report which in a normal market would have caused rates to drop further, but we have seen about a 3/8s improvement in mortgage rates for the week.
Here is what Illinois Home 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 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 6.00% 6.167% APR
15 year fixed rate 5.625% 5.728% APR
5-1 A.R.M. 5.625% 5.783% APR
For Jumbo loans over $417,000
30 year fixed rate * 6.50% 6.615% APR *
Special pricing requires 25% down payment or equity
7-1 A.R.M. 6.125% 6.239% APR
FHA LOANS - 3% down payment
With 1 point origination fee - 60 day lock
30 year fixed rate 5.875% 6.327% APR
With no origination fee - 60 day lock
30 year fixed rate 6.125% 6.395% APR
FHA APR reflects 3% down payment and the effect of mortgage insurance on the loan.
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.
Pete Thompson is an Illinois mortgage banker who provides superior mortgage service and competitive mortgage rates in Chicago, the Chicago area and throughout Illinois. Click here for a Free copy of The Real World Home Buyer's Guide - How to Save Thousands when Buying a Home and Getting a mortgage. For information on the latest mortgage news and a breakdown of current Illinois mortgage rates, please visit Illinois Mortgage Rates and News.
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