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Chicagomortgage's Blog

By Chicago Mortgage (JP Marzano) | Mortgage Broker
or Lender in Chicago, IL

Monday Mortgage Call (belated!) - Chicago's Best Source for Mortgage Info


Good morning,

 

I hope you enjoyed the long weekend. If you had to work yesterday, I’m sure all

the President’s thank you. I left the auto show yesterday wondering if there was

any car there that wasn’t overpriced. I still can’t think of one!

 

On today’s call: Markets, Housing, Home Equity Lines, Interest Rates

 

The markets are up today and the major indices are near five-year highs. Can you

believe Google’s per share cost is now over $800? I should’ve been a tech geek…

Uncertainty in Europe continues though and homebuilder confidence dropped

from the previous month after a nice streak of gains. The rising cost of materials,

food, rent, health insurance, etc., coupled with continued job growth issues has

investors weighing the level of optimism that has been present lately. With that

being said, I’m officially convinced that the consumer confidence figures are fixed!

Lots of news from the Fed will be reported on Thursday so stay tuned for that…

 

In housing, prices seem to be gaining steam everywhere around the country except

for Chicago. According to the latest Case-Schiller index for single-family home prices,

the level continues to drop here. For more info on home prices in Chicago, have a look

at this great article from Crain’s today. I agree with the guy from DePaul: until the

foreclosure inventory is dramatically reduced and demand is increased, prices around

here will stay flat. Hopefully for buyers the interest rates will stay low (more on that

in a minute) and home affordability levels stay at record highs. Here’s the article:

 

http://www.chicagobusiness.com/article/20130219/OPINION/130219791

 

I’ve talked about home equity lines of credit (“HELOC”) a few times, but it’s good

to revisit as I have a few clients purchasing homes right now and taking advantage

of these programs. HELOC’s are like revolving lines of credit for your home. You

have access to the line after you’ve paid it down and can use the money for just

about anything. The terms are usually different and the rate adjusts with the prime

rate (currently 3.25%, which hasn’t changed since December of 2008). It’s also a

great program for those wanting to put less than 20% down and therefore avoid

paying mortgage insurance. And generally, the payment with the HELOC is lower.

 

Interest rates are holding steady in the mid 3% range for the 30 year fixed program.

We’ve seen an alarming trend lately of consistent declines in the bond markets,

which coincides with the apparent optimism many investors seem to have these

days. As confidence in the economy increases and an assumption of job growth

among investors continues, these declines will gain steam, and rates will increase

at a steady pace. Let’s hope that pace isn’t too fast for would-be buyers and those

still needing to refinance.

 

Please pass this along…I’d appreciate it. And don’t hesitate to contact me with any

questions or comments.

 

Thanks and have a great week…

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