This is the lowest rate since 1971, the year that Freddie Mac  began tracking rates.

15 year fixed rates dropped to 4.03%, down from 4.06 last week and is this rate also the lowest on record.

If you are interested in becoming pre-approved for a mortgage loan or would like to refinance your current loan, please visit the list of trusted mortgage lenders that I have worked with over the years on my website www.OnlineChicagoRealEstate.com.

If you have any questions, please feel free to email me at lpruchnik@koenigstrey.com or call m at 1-312-893-1372.

Great news, the House passed, overwhelmingly, the extension of the Homebuyer Tax Credit which will allow buyers an extra 3 months to complete their purchases and qualify for the tax credit.

Homebuyers who signed a contract by April 30 will now have until Sept 30 to complete their financing obligations and close on their new home.

The National Association of Realtors estimates that approximately 180,000 homebuyers were going to miss today’s deadline.

You can’t talk to someone or pick up a newspaper and the topic of the struggling real estate market comes to the forefront. Real estate foreclosures and short sales are hot topics right now, but do you know what the difference is?

Here a short tutorial to get your facts straight and help you get a better grasp on the ever changing Chicago real estate market.

Credit Score:

Foreclosure: Affects your score for over 3 years. Lowers score from 150 to over 300 points

Short Sale: The effect of a short sale can be as short as 12 to 18 months. Lowers your score as low as 50 points if all other payment are being made.

Credit History:

Foreclosure: Public record on a person’s credit history for 10 years or more.

Short Sale: Not reported on credit history. Loan is usually listed as paid in full or settled.

Ability to Secure Mortgage in Future:

Foreclosure: You will be asked if you’ve had a foreclosure in the past and you must answer honestly. This will affect future rates.

Short Sale: No questions on applications pertaining to a short sale.

Securing FUTURE Fannie Mae Backed Loans on Primary Residences:

Foreclosure: Ineligible for a period of 5 years.

Short Sale: Ineligible for a period of 2 years.

Current Employment:

Foreclosure: Employers have the right and do check employee’s credit and it will show up.

Short Sale: Not reported on a person’s credit report and should not be a challenge with current employer.

Future Employment:

Foreclosure: Employers do check potential employee’s credit and a foreclosure on your credit report can be the greatest hindrance for someone looking for new job.

Short Sale: Not reported on a person’s credit report and should not be a challenge with current employer.

Security Clearance:

Foreclosure: A foreclosure can be as serious as conviction of misdemeanor or felony. If you are a government employee, military, police officer etc. it can be revoked

Short Sale: Does not challenge most security clearances.

Rates at this time one year ago on a 30 year fixed was 5.16%

I read a great article in Chicago Realtor  magazine that offered sound advice on how to get your credit under control and ready for a New Year. 

Here are the highlights: 

1. Know what your credit report says. Order a new one for 2010. You are allowed on free credit report each year.  www.AnnualCreditReport.com

2.  When reviewing your credit report, check for inaccuracies and work diligently to remove them. Not just bills or charges that might not be yours, but simple things such as correct address, spelling of names and middle initials.

80% of all credit reports contain errors.

3.  Pay your bills on time.  35% of your overall score is based on timely payments. 1 30 day late payment can effect your credit score by 22 points.

4.  Lower the amounts owed your bills.  Balances that are 31% higher then the available credit can effect your overall score.

5.  Ask to be alerted by your debtors should your credit lines decrease. That way you are prepared and no surprises will ensue.

6.  People believe that once they bring an account to a zero balance closing it will be a good idea, but not so!  Keeping your account open with a zero balance actually helps increase your credit score. 

For example, if you close an account that you have had open 10 years it can drop your credit score by almost 40 points!

7.  Don’t open new accounts. It takes a full year for a new account to show positively on your credit report.

8.   It helps to use your credit. Don’t just let it sit there.  Buy something and pay it off in full.  It shows accountability.

9.   Don’t allow numerous credit inquiries.  They can show on your credit report for 2 years and can drop your score considerably.

FYI’s

• Your personal inquiry into your credit does not adversely effect your credit score.
• When shopping for a mortgage there is a 14 day grace for inquires. If credit is pulled on the 15th day, then it works against you.
• It takes a year to reverse the damage of just on 30 day late payment.
• Check your credit report BEFORE you apply for a large loan or a mortgage.
• Be patient, it takes time to build strong credit.
• As for help if you need it. Credit counselors are available.  Email me at lpruchnik@rubloff.com for recommendations.

I hope the above list has been helpful to you.

30 year fixed mortgage rates dropped 11 basis points from last week ( a basis point is one-hundredth of 1%) to 5.59%!

15 year fixed dropped to 4.93% and the 5 year arm dropped to 5.05%.

Per the Mortgage Bankers Association, mortgage applications were up last week. (with the help of those trying to refinance at the lowest rates possible)

This segment of his interview with YoChicago.com outlines the unique difficulties being faced by condominium home buyers and sellers and how the federal mortgage guidelines are failing to take into account the unique condominium heavy markets such as Chicago.

Watch.

Some good news, sales INCREASED over  the previous month for the fourth straight time.

In Chicago, the median home price fell 29.5% in May to $225,000 compared with $319,000 in May of 2008.

Per David Hanna – President of the Chicago Association of Realtors

“The city of Chicago condominium sales numbers continue to reflect a critical need for governmental agencies to review the growing disparity in the ability to finance a condominium purchase in the city.  This affordable housing will become unaffordable and unattainable to many qualified first-time homebuyers in the city of Chicago unless existing federal guidelines, which do not take into account nuances of the local market, are modified.”

Bills have been introduced in both the Senate and the House to do the following:

• Open the Credit to ALL Buyers
• Keep it Available through Next Year
• Remove the current Income Limitations
• Allowing Current Home Owners to Participate

Currently the income limitations are $75,000 for a single and $150,000 for a couple and you cannot have owned a home in the last three years to take advantage of the credit.

There is also talk of a possible $3,000 tax credit for those refinancing.

If these bills pass it propbably woulnd’t be until the fall.  Keep watch Chicago!

Realty Times Article