Illinois offers five separate mortgage programs for home buyers. Of these five programs most can be used in conjunction with FHA or VA financing. In some of the rural areas USDA loans are available. Loan types in Illinois include:
- Fixed rate mortgages. These mortgages come in 10, 15, 20, 30 and 40 year time frames offering a fixed rate of interest throughout the loan. FHA and VA mortgage assistance can be applied
- Adjustable rate mortgages. The most common ARM loan is the 5/25 loan. However, depending on lender there can be a variety of adjustment rate times. VA and FHA backing are available
- Balloon Loans. These loans give a small payment amount for the first 5 or 7 years of the loan. After that time the balance of the loan must be paid in full or refinanced.
- Interest only loans. These loans are much like the balloon loans where they have small payments for a short period of time. After that time period loan payments will increase.
- Flexible payment mortgages. While this type of loan is almost obsolete, it is still available in Illinois. This loan program allows the borrower to determine the amount they will pay each month on the loan. This loan program is geared toward seasonal workers and the self employed.
Illinois Mortgage Rate
Mortgage rates in Illinois vary greatly state wide. In and around the Chicago area the mortgage rates are very high, higher than the national average. In other parts of the state the mortgage rates are even or below the median price range for the nation. As with any type of loan, credit score will be a determining factor in the loan interest rate. The higher the risk is to the bank the higher the interest rates will be on the loan. Other factors, including location of the house , will be used to determine interest. Lending institutions may have different programs that help reduce rates.
Illinois Refinance Rates
Illinois refinance rates are higher around the Chicago area that in other parts of the state. However, on average refinance rates are equal to that of the surrounding states. All applicable requirements needed for a first mortgage will apply to a refinance. Type of loan, amount refinanced and if equity is tapped will also play a part in the final rate.
Illinois Mortgage Brokers And Lenders
Illinois has hundreds of lending institutions to select from when looking for a mortgage. Borrowers can access the internet, local or national banks, Credit unions or private lenders. Lenders can offer special programs such as first time home buying or bad credit mortgages. Lenders can also offer promotional interest rates and points buying programs.