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The good news is that it appears that here is a deal to extend the debt ceiling. The drama all last week was whether congress could agree to any kind of plan to raise the debt ceiling, allowing the government to continue to pay their bills. Initially, the bottleneck was with the most conservative Republicans in the House of Representatives. These Tea Party backed congressman, mostly freshman elected last year, wanted cuts over and above what the Republican leadership sought, and only agreed to a deal with a balanced budget amendment added in (which has no chance of ever passing). A Democratic bill in the Senate designed to meet the Republican demands (no new revenue sources, deep cuts in spending) stalled quickly as most of the Republican delegation signed a letter stating that they wouldn’t support it, meaning the bill would be filibustered and never brought up for a vote. So it was back to the drawing board with the clock ticking down. Sunday night a new agreement was reached, one that was acceptable to both Republican and Democratic leadership, and that the President will sign off on. This still isn’t a done deal, though. Many Republicans are angry at triggers in the bill that could slash defense spending, and many Democrats think their leadership gave away the store and are threatening to try and kill the bill. It is still likely that this, or something close will go through and we will avoid a default. But this whole charade is an example of pure politics and government at its worst, and the uncertainty this debate has raised can’t be good for confidence in the economy going forward.

The bad news is that the economy is softer than we thought, and appears to be slowing.The GDP (Gross Domestic Product) numbers were released at the end of last week, and they showed that the economy had grown by 1.3% on an annual basis for the second quarter, much lower than expected. The first quarter numbers were revised down to 0.4%. The revisions go back several years and show that the recession was deeper than we thought before, and the recovery has been shallower. It is clear that there will be no new stimulus programs coming soon, and the new watch word is austerity with the government committed to trimming down their spending. This is a necessity in the long run, but it may cause more pain going forward, as neither business or consumers are ready to pull out their wallets.

Mortgage rates stayed about the same for the week, though it was volatile if you were watching the markets. As the debt ceiling debate claimed the spotlight, mortgage bonds sold off and worsened throughout the first part of the week. When the GDP figures were released, the mortgage bond market melted upward and we are now near the best point of the year. Mortgage lenders haven’t lowered rates to align with where bonds are yet, but if the debt ceiling issue is resolved quickly, rates should improve more. The jobs report will be released on Friday, several other important reports come out over the course of the week, and you can expect more drama in the political arena. Expect volatility in rates this week. If I can help you in any way with either a mortgage for a new home you are purchasing, or a refinance of an existing home, give me a call.

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 640 Fico score, but loans are available with credit scores as low as 580. 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, including credit scores, property type, amount of down payment and a number of other factors. 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 Current Quote – FHA 203k Rehab and Renovation loans are now available as 30 year fixed or 5-1 ARMs.

VA Veterans Administration 0 Down Loans

 

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.