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Mortgage rates are now at their best levels ever, or at least the best over the 50 years they have been tracking 30 year fixed rate mortgages. The general consensus now is that the economy, though still growing, is decelerating. The financial community is now seeing that this isn’t going to be a fast recovery, and with continued high unemployment, deflation, or more likely disinflation, is a bigger immediate worry than the fear of inflation. The big news last week was mostly bad – June new home sales were the worst on record, the GDP came in at a gain of 2.4%, lower than expected and about half the previous reading. For good news, the consumer confidence index came in slightly better than expected, though still off from the previous month’s reading. The stock indexes are still holding, and corporate profits are still high, but much of this has to do with cost cutting and higher productivity, not top line sales growth.

As I have said before, bad news in the economy is good news for mortgage rates. This week we broke out of a trend and are now at the lowest rates ever. The graph below shows the activity in mortgage bonds) which to a large extent determine mortgage rates) over the last 3 months. Each figure on the graph shows one days activity. The green means that the market closed higher than it opened, the red means it closed lower. The bonds are trading on price, so the higher prices mean lower yields, or lower mortgage rates. As you can see, Friday’s reading is a new high (though it was down from the price it opened at).

(Mortgage Backed Securities graph is courtesy of Rate Watch by MortgageCoach.com)

The question now is, is this as good as it gets? We are now at a point where nearly everyone who is able to refinance can benefit from it – even those who took advantage of the low rates in the last big refi boom last year. With no-cost and low-cost options available for many home owners, this could be a great way to save money and lock in historically low mortgage rates. But even though rates are now in the low 4s, I know there are people who will wait for them to go even lower. Last year there were a lot of people (both financial analysts and homeowners) who were convinced that rates would be at 4.50%. The new goal is sure to be 4.0%. The truth is, no one knows where the economy will end up or where mortgage rates will bottom out. I do know that bthese rates are the lowest ever, and if you can refinance with no costs, your savings are immediate. Whether you lock in now, or let it ride as you wait for even lower rates, it does make sense to get your documentation together and talk to a good loan officer to see what this will do for you.

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 start rate for the next 5 years. 2% cap for next 5 years – so a blended rate over 10 years is no more than 1% over the start rate. Super Jumbos available.

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