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January 28th, 2011

Mortgage rates start the week in negative territory but likely to improve on unrest in Egypt

Are you currently in the process of buying a Lincoln Park home or refinancing your Chicago mortgage?  Trying to decide when to lock can be a stressful and difficult decision.  In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible.  Please see my recommendations below.

If closing your Chicago mortgage in:

  • 5-7 Days: I recommend LOCKING
  • 7 or more days: I would suggest FLOATING with extreme caution.  With this much volatility, I would LOCK on any improvements as well as any major upward repricing.

The week that was:

This week could have been disastrous for ratewatchers as there was a lot of economic data, some T-Bill auctions and a bunch of corporate earnings reports.  In addition, this was the week of President Obama’s State of the Union address and the release of the FOMC policy.  While we did see and uptick in mortgage pricing after the government’s input, it could have been much worse.  Although received favorably, President Obama’s remarks did not signal any great revelations and the continued stress on “investment” in the economy sent a signal of greater debt.  As far as the FOMC was concerned, there was a definitive signal that there could be continuance of the quantitative easing strategy as well as a belief on their part that the economy is generally improving.  Coupled with some positive earnings reports, this news was enough to send the Dow over 12,000.  Subsequently, the price of Fannie Mae and Freddie Mac conforming loans saw an increase.

All of this changed Friday as unrest in Egypt sent investors running.  The ensuing flight to quality reversed the trend in mortgage pricing for the better.  Although many lenders have not repriced the trend is that this will likely occur.  I would recommend that everyone with loans in process closely monitor the market and keep in close touch with their bankers to ensure they take best advantage of the situation.

30 YEAR FIXED

National Average Rate: 4.80%

Fees/Points: 0.7

15 YEAR FIXED

National Average Rate: 4.09%

Fees/Points: 0.7

Source: Freddie Mac

January 25th, 2011

Short trading week marked by mortgage rate do si do

Are you currently in the process of buying a Lincoln Park home or refinancing your Chicago mortgage?  Trying to decide when to lock can be a stressful and difficult decision.  In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible.  Please see my recommendations below.

If closing your Chicago mortgage in:

  • 5-7 Days: I recommend LOCKING
  • 7 or more days: I would suggest FLOATING with extreme caution.  With this much volatility, I would LOCK on any improvements as well as any major upward repricing.  You do not want to miss the boat.

The week that was:

A bit of dancing this week as rates dropped a bit early on and returned recent levels by Thursday.  The impetus for the drop was light trading on Monday and continued rebound from the week prior.  Procrastinators, however, were punished as the equities market reacted favorably to an increase in the sale of existing homes and continued recovery in employment with a decrease in the 4 week moving average of new jobless claims.  All in all, we found ourselves back where we started.

30 YEAR FIXED

National Average Rate: 4.74%

Fees/Points: 0.8

15 YEAR FIXED

National Average Rate: 4.05%

Fees/Points: 0.8

Source: Freddie Mac

January 19th, 2011

Touch and go week ahead for mortgage rates

Are you currently in the process of buying a home or refinancing in Chicago or vicinity? Trying to decide when to lock can be a stressful and difficult decision. In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible. Please see my recommendations below.

If closing your Chicago mortgage in:

  • 5-7 Days: I recommend LOCKING
  • 7-15 Days: I recommend FLOATING, unless low risk tolerance.
  • 15 + Days: I recommend cautionary FLOATING

The week ahead for economic data that can affect mortgage interest rates:

Wednesday

  • MBA Weekly Mortgage Applications
  • December Housing Starts
  • December Building Permits

Thursday

  • Weekly Jobless Claims
  • December Existing Home Sales
  • December Leading Economic Indicators
  • January Philadelphia Fed Business Index
January 19th, 2011

Are there still low down payment mortgage options available?

I received an interesting question the other day which I felt warranted a post as it is one that I am getting more frequently these days.

Question: Can I still get an 80/15, 30yr fixed mortgage loan with no Mortgage Insurance (MI) and no escrow account?

Answer:  Solutions like this are few and far between these days. There are some second lenders who can get you to 90%, but a 95% loan to value is rare indeed. I would ask you “what’s your aversion is to mortgage insurance?” as it may be your only option for a conventional loan up to 95%. It is often tax deductible and actually provides less risk, as your second loan would likely be a Home Equity Line tied to the prime rate. This could cost you a lot if rates spike. I recommend that you look at single premium MI which would actually bear an upfront cost with no monthly mortgage insurance cost. You could possibly even negotiate a deal where the seller pays this.

Be careful about working under old paradigms. It seems as if you may not have explored all of your options due to an inherent aversion to MI.

January 12th, 2011

Lincoln Park Real Estate Market Statistics

As the new year begins ramping up, nearly everyone I talk with wants to know “how is the Lincoln Park real estate market doing?” So I thought I’d go with the old adage that a picture is worth a thousand words and make some general comparison from there.

Click to enlarge

If you click on this picture, you’ll be able to see a larger, readable picture of the overall home sales in Lincoln Park for 2010. For a quick review, the average sales price for all single family homes was $1,643,119, condos were $425,224 and multi-units were $813,627.

Click to enlarge

If you click the next picture, you’ll see a larger, readable picture of the overall home sales in Lincoln Park for 2009. Again for your quick review, the average sales price for all single family homes in 2009 was $1,790,627, condos were $449,592 and multi-units were $770,871.

Here’s the bottom line numbers you’ve been waiting for: when comparing 2010 average sales over 2009, single family home prices are down 8%, condos are down 5.5% and multi-unit buildings are up 5.5%. Yes, you read that right, up 5.5%! Looks to me like investors are taking advantage of this market.

What does this mean to you? If you live in Lincoln Park, click on the picture and you can see how the sales were for your particular size of home. If you don’t live in Lincoln Park, contact me and I will happily send you the statistics for your neighborhood. Should you live outside of the Metro Chicago market place, let me know where you live and I will be happy to introduce you to one of the Realtors® from my national (or international!) network.

Whether it’s through getting a great deal on your primary residence or buying rental property, this is a market where where wealth is built! What are you doing to increase your future net worth?

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