Getting the best mortgage rates

Rates on home loans are still attractive. Currently, the average rate for a 30-year fixed-rate mortgage is 3.6 percent, according to Freddie Mac, a mortgage buyer, compared with an average rate of 5.4 percent for the last ten years. But to qualify you'll need a sizable down payment (generally 10 percent to 20 percent of the home's value), a solid FICO credit score (720 or higher) and plenty of documentation to prove your income, among other things. If you don't clear those hurdles, you may be a good candidate for an FHA loan, which is a mortgage backed by the Federal Housing Administration. These loans charge just 3.45 percent in interest today and require a down payment of only 3.5 percent. Also, you don't need sterling credit. You may be approved with a FICO score as low as 580, though many lenders want a minimum of 620 today, says Keith Gumbinger of HSH.com, which keeps tabs on the housing industry. New mortgage fees So what's the catch? You may owe more in fees. FHA borrowers who put down less than 20 percent have to pay mortgage insurance. Starting April 1, the premium for new loans of up to $625,500, rises by 10 percentage points (for bigger loans, the fee goes up by 0.05 percentage points). And beginning June 3, most new borrowers will have to pay the premiums for the life of the loan. Previously, mortgage insurance was dropped once the loan balance fell to 78 percent of the home's original value. Conventional loans also require mortgage insurance for small down payments, but lenders may be willing to waive the charge once you've paid down a chunk of the loan. more

Homebuying: Should you take the plunge?

Spring is typically the busiest season for homebuying, and this year the housing market is already showing signs of coming back to life. According to the National Association of Realtors, the median price for U.S. homes was $173,600 in January, the latest month of available data. That's up 12.5 percent from the same period in 2012, and is the largest year-over-year increase since 2005. What's more, even though home prices are beginning to rise, affordability continues to improve — especially for first-time buyers. The NAR's first-time homebuyer affordability index reached a record high of 127.7 in 2012 (the higher the number, the better). In 2006, at the real-estate market's peak, the index stood at 71.3. Low mortgage rates and an improving economy are helping make homebuying more attractive today. Should you take the plunge? Consider the following. Renting vs. owning In many areas of the country, it is now cheaper to own a home than it is to rent. But much of that advantage still depends on the size of your down payment, the interest rate you'll pay on a mortgage and the amount of time you plan to stay put. more

Home sales and prices are up, leading indicators show...

New numbers from the Illinois Association of Realtors show that Chicago's nine-county area saw a 19.2 percent month-over-month increase in December 2012 over December 2011. For the whole year, 2012 totaled 90,365 sales, up 26 percent from 2011. December's median price was $151,500, up 4.5 percent over that month last year. Regionally, the Illinois Association of Realtors reports, single family home sales were up 17.1 percentRegionally, the Illinois Association of Realtors reports, single family home sales were up 17.1 percent in December with prices showing a 4.3 percent increase; while total condo sales were up 23.1 percent, with prices showing a 6.5 percent gain. Narrowing the focus to the city, Chicago saw a 14.6 percent year over year increase in sales while condo sales increased 17. 7 per cent, year over year. Home prices were up 19.4 percent overall in December versus the same month in 2011. Another key indicator - the number of days a home sits unsold - is down 17.5 percent, from 103 days to 85. The decrease in time on market, says Zeke Morris, president of the Chicago Association of Realtors, "shows a continued clearing of inventory, of both single-family homes and condominiums." But compared to other regions of the country, our year-over-year numbers are not so impressive. Zillow reports that nearly every national market saw big price gains in 2012. Cincinnati and Chicago regions were the two that didn't. Our median sales price in 2012 was $160,000, down 1.5 percent from $162,500 in 2011...more