Real Estate Toronto Canada

Mortgage rates dropped this week to their lowest point in the last year. The last several weeks have seen mortgages trending lower, but this week mortgage bonds (which are the basis of mortgage rates) broke through resistance and into a range that was considered almost impossible a few months back. The conventional wisdom then was that mortgage rates had to rise. Rates were artificially low because the government was subsidizing low rates by buying $1.25 trillion in mortgage backed securities. That program ended almost two months ago. The government is still borrowing at a fevered pace, which would normally fuel fears of inflation, but inflation is tame as can be (the rate is the lowest it has been since 1961). So what brought about this huge shift in the conventional wisdom? The short answer is Greece. The longer answer is that there is a growing realization that despite signs of improvement in the economy, we aren’t through the woods yet.

Let’s start with Greece. It turns out that Greece had a lot more debt than previously disclosed, and is a basket case financially. But the problem isn’t really Greece, but the real state of the European Union and their currency, the Euro. Taking on the Euro is now looking like a grand experiment, and maybe another example of bubble thinking. Ten years ago when the Euro was established, it looked like a worthy competitor to the dollar as a universal measurement of value. But having a currency span across so many different countries, where you have a mixed bag of economies from the strong (Germany) to those with too much debt and weak finances (Greece, Portugal, Spain and Ireland included) was a weak fit. Now that Greece has crashed (and been propped up through a huge rescue plan) the question is which domino will fall next. The rescue plan calmed the markets for a few days, but the trend lines are drawn, and it’s already clear that the rescue plan that was supposed to show shock and awe, is already being seen as inadequate. Now the focus is on who will be next. It seems a lot like what was happening not so long back as the sub- prime mortgage companies imploded, setting off a chain that spread throughout the industry and rocked the whole economy.

The global economies are interlinked and as the dominos start to fall, stocks get hurt too. This all feeds the flight to safety and money flows out of riskier investments into what is still seen as the safest investment around, US treasury bonds. Mortgage bonds closely track the movement in treasuries, so as treasury yields dropped, mortgage rates fell too. The market worsened a little on Friday, but we are still seeing the lowest mortgage rates in the last year. With the hint of a double dip recession is now in the air, higher rates aren’t likely to come in the near future.

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

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

** (5-5 ARM is fixed for first 5 years, with 2/6 caps it can’t go more than 2% above the statr rate for the next 5 years. )

2% cap for next 5 years

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 Quote

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