Oak Lawn, IL Real Estate News

By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
For some homeowners, electing to take an adjustable rate mortgage over a fixed rate one can be matter of budgeting. ARMs tend to carry lower mortgage rates and, therefore, lower monthly mortgage payment as compared to a comparable fixed rate loan. Relative to fixed rate mortgages, current ARM pricing is excellent. Freddie Mac's weekly Primary Mortgage Market Survey puts the 5-year ARM mortgage rate lower than the 30-year fixed rate mortgage rate by 1.02 percent. On a $250,000 home loan, a 1.02 differential yields a payment savings of $149 per month. ARMs are not for everyone, of course. Over time their rates can change and that can frighten people. An ARM can finish its respective 30-year lifespan with a mortgage rate as much as 6 percentage points higher from where it started. Some ho...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
Credit card debt, left unchecked, can pile up quickly. Especially for debtors making minimum payments.   According to the Federal Reserve, a credit card balance of $5,000 at 23.99 percent APR won't pay off for 16,127 years. That's one reason why it's important to manage your credit card rates, and renegotiate them whenever possible. In this 4-minute piece from NBC's The Today Show, you'll learn the tested tactics that can cut a credit card rate, and get monthly payments to a more manageable range. And it's do-it-yourself -- no debt management firms required. Some of the tips in the video include: Compare your current rate to the rate offered to new customers. Ask the lender for "new customer rate" if it's lower. If your credit score has improved since application, ask for an interest r...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
Mortgage markets gained last week as a combination of safe-haven buying and an improving economic outlook attracted new buyers. Demand for mortgage-backed bonds outweighed supply and conforming and FHA mortgage rates edged lower. Last week marked the second straight week that mortgage rates fell in and around Illinois. Rates had risen over the previous 7 weeks. According to Freddie Mac's weekly mortgage rate survey, the national average rate for a 30-year fixed rate mortgage is 4.77 percent with an accompanying 0.8 points required. This week, with no new data due for release, look for last week's two biggest stories -- jobs and debt -- to carry forward. The first such story relates to jobs. Friday, the Bureau of Labor Statistics released its monthly Non-Farm Payrolls report. Consensus e...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report. More commonly called "the jobs report", the government's data include raw employment figures and the Unemployment Rate. The jobs report hit the wires at 8:30 AM ET today. It's making big waves in the mortgage market and may help home affordability for buyers in Chicago this weekend, and would-be refinancers across Illinois. For this month, and for the rest of 2011, employment data will figure big in mortgage markets. 7 million jobs were lost in 2008 and 2009. Fewer than one million jobs were recovered in 2010. For the economy to fully recover, analysts believe that jobs growth is paramount. Consider how job creation influences the economy: More jobs means more income and more spendin...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
Starting April 1, 2011, loan-level pricing adjustments are increasing. Most conforming mortgage applicants will face higher loan costs. Loan-level pricing adjustments are mandatory closing costs. They're assigned by Fannie Mae and Freddie Mac, and based on a loan's specific risk to Wall Street investors. First constructed in April 2009, loan-level pricing adjustment are a means to help Fannie Mae and Freddie Mac compensate for "riskier loans" by bolstering their respective balance sheets. Since the initial roll-out, Fannie and Freddie have amended adjustments five times. The pending April adjustment will be the 6th revision in two years. No class of conforming borrower is exempt from LLPAs. Each loan delivered to Fannie Mae is subject to a quarter-percent "Adverse Market Delivery Charge...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
The Federal Reserve released its December 14 meeting minutes Tuesday afternoon. There wasn't much there to disturb mortgage markets, thankfully. The "Fed Minutes" is an official recap of the most recent meeting of the Federal Open Market Committee. It's published 8 times annually, 3 weeks after the FOMC adjourns. The Fed Minutes is similar to the meeting minutes released after a corporate conference or condo association gathering in that they provide additional details about the conversation and debate that occurred between meeting attendees. The Fed Minutes are a lengthy companion to the Federal Reserve's brief, more well-known, post-meeting press release. But, whereas the press release is measured in paragraphs, the minutes are measured in pages. Here is some of what the Fed discussed...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
The housing market continues to expand, and surprise. According to the National Association of REALTORS®, November's Pending Home Sales Index gained 3 percent from October. A "pending home sale" is a home under contract but not yet closed.  The index is now at its highest point since April 2010's federal tax credit contract expiration deadline. If the tax credit really did "borrow" sales from the summer months, as has been theorized, housing has rebuilt its foundation.  We know this because, of all the housing data available to Oak Lawn  homeowners and home buyers, the Pending Home Sales Index stands apart as a forward-looking report -- its designed purpose as described in its methodology. Because 80% of all homes under contract close within 60 days, and a statistically significant shar...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
Mortgage markets improved last week during a snow- and holiday-thinned series of sessions on Wall Street. Mortgage bonds improved on year-end profit-taking, mostly, leading conforming mortgage rates in Illinois lower. Last week marked the first calendar week in which mortgage rates dropped since early-November, a pleasing development for rate shoppers and home buyers. Falling rates means lower monthly mortgage payments. But don't expect for rates to improve again this week, however. Last week's gains were the result of extremely low trading volume and a close-out of 2010 mortgage bond positions. With markets re-opened for 2011, and Wall Street back at full volume, mortgage rates may resume rising. There will be a lot of data and information on which for mortgage bonds to trade, too. The...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
The Case-Shiller Index posted awful numbers in its most recent reading. Each of the index's 20 tracked markets showed home price deterioration between September's and October's respective report. Some markets fell as much as 2.9 percent. The drop in values is nothing about which to panic, however. The Case-Shiller Index is just re-reporting what we already knew. It's a common theme with the Case-Shiller Index, actually; a trait traced to the report's methodology. The Case-Shiller Index is an imperfect housing indicator with 3 inherent flaws. The first flaw is that the index makes use of a limited data set, tracking values in just 20 cities nationwide. That data set is then projected across the more than 3,100 other municipalities in the United States. The "national figures", therefore,...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
With 2010 coming to a close, the "experts" are out in full force, making predictions for next year's housing and mortgage markets on business television and in the papers. Predictions for 2011 are wide-ranging: Some say home prices will rise in 2011 Some say home prices will fall in 2011 Some say mortgage rates will rise in 2011 Some say mortgage rates will fall in 2011 The problem with housing and mortgage predictions is that -- like all predictions -- they're just educated guesses about the future. Nobody knows what will really happen with the housing and mortgage markets in 2011. All anyone can do is theorize. As laypersons, though, it can be hard to separate theory from fact. Television can make that task even more difficult at times. As an example, when a well-dressed economist goe...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
Like most housing data in November, the most recent New Home Sales report showed sales volume increasing last month, and home supplies falling. According to the U.S. Department of Commerce, sales of new, single-family homes increased to 290,000 in November on an annual basis, a figure equal to the New Home Sales 6-month rolling average, and a 6 percent improvement from October. At the current pace of sales, the national supply of new homes for sale will be exhausted in 8.2 months -- a strong 0.6-month improvement from October. This data is consistent with the most recent Existing Home Sales report. It showed sales volume rising 6 percent, too, and a similarly-strong inventory drop. For the housing market in Chicago , it's another step in the right direction. Since May's post-tax credit ...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
Mortgage markets worsened again last week as the holiday-shortened sessions did little to buck recent momentum. Although Freddie Mac reported mortgage rates dropping 0.02% from the week prior, loan officers on the street will report the opposite. Rates did not fall last week. Conforming mortgage rates in Illinois moved higher for 7th straight week. For rate shoppers and home buyers, it's been a harrowing two months.   Since the Federal Reserve announced its QE2 program November 3, 2010, mortgage rates have moved from all-time lows to 7-month highs. Mortgage payments now cost $38 more per month per $100,000 borrowed as compared to the day before the stimulus was announced. Mortgage rates look poised to increase again. Here's why. A major reason why mortgage rates were so low, for so long...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
Existing Home Sales jumped another 6 percent in November, the report's third month of improvement since bottoming in July. According to the National Association of REALTORS®, a quarter-million more existing homes were sold during the annual period ending in November as compared to October.  An "existing home" is a home that cannot be considered new construction. Additionally, the national housing supply dropped by a full month. At the current pace of existing home sales, the complete stock of homes for sale will be exhausted in 9.5 months. November's strong housing data is yet another signal to buyers in Chicago that the housing market's foundation has been rebuilt, and that a rebound is imminent.  It's helped that there are great "deals" on which for buyers to pounce. In November, shor...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
The number of single-family Housing Starts increased in November, adding 30,000 units as compared to October. The Census Bureau defines a "housing start" as a home on which construction has started. November's starts represents a 7 percent increase from the month prior. However, if you see the Housing Starts story online or in the papers, you'll notice that the press is calling the market gain at 4 percent. So which result is right? The answer is both. The government's monthly Housing Starts data is published as a composite report; lumping activity among 3 separate housing types into a single, group reading. The 3 housing types are: Single-family homes (i.e. 1-unit) Multi-unit homes (i.e. 2-4 units) Apartments (5 units or more) The group reading is a fair description of the market and i...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
According to foreclosure-tracking firm RealtyTrac, the foreclosure filings fell 21 percent in November to 262,339 units nationwide. A foreclosure filing is defined as default notice, scheduled auction, or bank repossession.  November marked the first time since February 2009 that the number of monthly filings failed to surpass 300,000 units. There were other notable November statistics, too, included: November's 21 percent month-to-month decrease was the largest in RealtyTrac's recorded history November's 14 percent year-to-year decrease was the largest in RealtyTrac's recorded history Nevada led the nation in foreclosure activity for the 47th straight month However, we can't read into November's RealtyTrac report too much; ultimately, history may treat it with an asterisk. Controversy...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
Mortgage markets worsened again last week as belief in a U.S. recovery and concerns for inflation took hold on Wall Street.  Conforming mortgage rates rose in Illinois for the 6th straight week. According to Freddie Mac's weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage is 0.66% higher this week as compared to rates on November 11, but loan originators will tell you that figure is understated. Real mortgage rates -- mortgage rates available to everyday homeowners and buyers in Chicago are up by as much as a full percentage point since November, and loan costs are rising, too. The Refi Boom of 2010 is over. Last week, mortgage markets revolved around the Federal Open Market Committee. The FOMC met Tuesday and voted to leave the Fed Funds Rate unchanged withi...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
Home builder confidence is holding firm this month, according to the National Association of Home Builders. The group's monthly Housing Market Index survey posted 16 for December. That's the same value as from November. It's also equal to this 2010's average HMI reading. HMI is scored on a scale of 1-100, and is a composite of 3 separate home builder surveys measuring single-family sales; projected single-family sales over the next six months; and prospective buyer foot traffic. The results of the 3 surveys were as follows: Single-Family Sales : 16 (unchanged from November) Projected Single-Family Sales : 25 (unchanged from November) Prospective Buyer Foot Traffic : 11 (from 12 in November) Values of 50 or better indicate favorable conditions for home builders. Values below 50 indicate ...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
Loan-level pricing adjustments are mandatory loan fees based on a borrower's specific default risk. First introduced in 2008, LLPAs were Fannie Mae's and Freddie Mac's logical response to massive balance sheet losses. At the time, the housing market was deteriorating and mortgage delinquencies were rising. To "better align with loan risk characteristics", the two entities created specific fees to be associated to specific loan traits, to be charged to all borrowers. LLPAs are still in existence today. Today's loan-level pricing adjustments can be grouped into 5 basic categories. Application exhibiting any of the 5 traits can trigger LLPAs, adding to a borrower's loan fees: Credit Score (i.e. the borrower's FICO is below 740) Property Type (i.e. the subject property is multi-unit) Occupa...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
Today, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged within in its target range of 0.000-0.250 percent. In its press release, the FOMC noted that since November's meeting, the "economic recovery is continuing", but at a pace deemed too slow to make a material impact on unemployment rates. It also said that household spending in increasing, but remains constrained by joblessness, tight credit and lower housing wealth. In addition, the Fed used its press release to re-affirm its plan to keep the Fed Funds Rate near zero percent "for an extended period" while also opting to keep its $600 billion bond market support package in place. And lastly, of particular interest to home buyers and mortgage rate shoppers, the FOMC statement devoted an entire parag...
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By Kevin Lanham, Chicagoland FHA Expert
(Pacor Mortgage Corp)
The Federal Open Market Committee holds a one-day meeting today, its 8th scheduled meeting of the year and 10th overall. The FOMC is part of the Federal Reserve, the government group that sets U.S. monetary policy. The Fed's primary policy-setting tool is an interest rate known as the Fed Funds Rate.  The Fed Funds Rate is the interest rate at which banks borrow money from each other.  2 years ago Thursday, in an effort to jump-start the economy, the FOMC met and voted to lower the Fed Funds Rate to as close to zero percent as possible without actually going to zero percent; the benchmark rate was prescribed to a range of 0.000-0.250 percent. The Fed Funds Rate had never been set so low before, but ever since, it's been held to that range. It will likely be there until early-2011, too, ...
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