"You've Caught the NET!"

Oh boy, my clients here in Chicago and the suburbs are reading the papers and surfing the web again!

They remind me 30-Year Fixed Mortgage Rates have dropped - in some cases as low as 5 5/8%, for purchases and re-fi's.  With they buyer's market here in Chicago, some want to run right out, pick up a steal of a home, finance it cheaply - and perhaps resell it in a year or two for big money appreciation and profit.

Others simply want to refinance their current adjustable rate home loans, taken our a couple of years ago when they purchased with low or no money down, before their current rates begin the reset cycle later this year.

Many lenders are saying "no" to both groups - as underwriting standards have tightened considerably, as we all know.  Until legislation changes things, the jumbo loan threshold still stands at a modest $417,000, or higher-than-advertised rates apply.  With new Fannie Mae and Freddie Mac guidelines, scheduled to take effect in March, those with previously-acceptable FICO credit scores in the 600-680 range are being hit with additional fees or rate surcharges.

And those with low equity in their current or proposed home, or those require a "stated" or "no doc" loan (many Realtors, perhaps) are finding considerable barriers to the best rates.

Of course, those to feel the biggest crunch are those whose rates will reset to substantially higher amounts - bumping their monthly payments up, in some cases, by $100 monthly, or more!   In many Chicago Neighborhoods, selling quickly, even at break-even, it not an option for those finding themselves highly-leveraged, and the re-fi option is just not available to many.

It appears you do need good financial credentials, and some money toward equity, to take advantage of the current situation - yes?

See our posting in our Dean's Team Blog Center - BlogChicagoHomes.com, for more info as well as a link to Michael Oneal and Mary Umberger's article in today's Chicago Tribune.

DEAN & DEAN'S TEAM CHICAGO