Best Mortgage Rates in Chicago

Joseph Meyer
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Mortgage Rates in Chicago


Chicago is one of those cities with a lot of pride and history behind it. It was the city that once hosted the World’s Columbian Exposition, a celebration of the 400th anniversary of the arrival of Columbus in the New World. In fact, the statue that is now present in the Lincoln Park was built for the Columbian Overseas Exposition.

Chicago is also the only city in the Midwest to host one of the modern seven wonders of the world, the Willis (Viaduct) Tower. The city, as you probably already know, is known as the hub of the Midwest.

And this means that the major financial institutions have chosen to put their operations here. Companies like Bank of America, Chase, and HSBC kept their headquarters in Chicago. Of course, this became even more obvious when the Wall Street was on the line.

Another beautiful fact about Chicago is that it’s among the most bike-friendly cities in America, if not in the world. It even has its very own bike-sharing system, Divvy, which is the largest in the country.

Elements That Affect Mortgage Rate & Refinance Rates in Chicago


Lenders calculate mortgage rates in different ways, which, in turn, influences the rate quote for a borrower. Lenders want to know more about the borrower and the buying power that the borrower has. The way in which the borrower answers lender questions during the application process reveals certain things about the person, such as his/her credit standing, his/her employment status, and how much money he/she is willing to pay out of pocket for closing costs.

The lender’s decision to offer more or less favorable interest rates will be based on different issues such as:

  • Location of the property
  • Location of the property “ in the city or in the suburbs
  • Desirability of the property
  • Length of mortgage term
  • The property’s value

Credit Score

If you’re going to be borrowing money or just thinking about it, chances are you’re going to want to know what your credit score is. Credit scores are used not just by lenders but in all kinds of places. For example, you might want a credit card or just buy a cell phone. Credit scores can be used to determine your eligibility for a loan, credit card or sometimes even certain employment opportunities.

In general, the higher your credit score the lower your rates will be on loans, credit cards and insurance plans, for example. Lenders prefer consumers with high credit scores because the likelihood that you’ll default on the loan is lower. Because of this, your credit scores can be used as a predictability of your behaviors in the future. That’s why it’s important to watch your credit scores and keep them in good shape.

One of the most popular scores, and the most widely used is known as your FICO, or Fair Isaac Corporation score. This score will determine if you qualify for a loan and what your payments will look like, as well as your interest rate. Your FICO score is based on the information in your credit report, which is created by the three major credit bureaus: Experian, Equifax and Transunion.

Down Payment

Your down payment is the amount of money that you pay upfront for the loan. It’s generally the largest portion of your mortgage and will be put toward paying the first year of your principal. The reason why a down payment is essential is because you have to prove that you have the funds to buy the home and cover the loan.

The amount required depends on the type of mortgage you choose.

FHA loans require at least 3.5% of a down payment. A conventional loan requires at least 10% down. VA loans require no down payment. You will save a significant amount of money with a VA loan but you may put yourself at risk by relying on the government to protect your payments.

Loan Term

The loan term will be your duration (in years) of having your mortgage. The common loan terms you will find will be 15, 20, 25, and 30 years. The majority of mortgage holders will choose a home loan rate fixed for one or more years. The purpose of choosing a 5-year home loan rate fixed mortgage is to take advantage of the low rates. The term can be renewed at the end of the 5-year period for another 5 years, again to keep the low rates.

Type of Refinance

The interest rates on mortgages can vary greatly based on the type of refinance you choose. For example a FHA refinance typically is the cheapest route, as a government backed agency these rates are usually low and will help your refinance turn out much cheaper.

Many lenders will try to up-sale a borrower to a new type of loan. There are lots of different loan products to choose from so it is important to know what rate you are being offered as well as the terms of the loan.

One of the simplest ways to save money on your refinance is to shop around. Most banks and lenders will offer a couple of types of loan products, and a phone call or two could save you a decent amount of money in the long run. If the lender says that there is not a loan product out there for you make sure to ask for a list of the bank or lenders where you can find that loan product.

Best Mortgage & Refinancing Rates in Chicago

Finding the best mortgages in Chicago can definitely help in budgeting and saving a lot. These mortgages are generally better than the fixed rate rail mortgages and generally have lower costs. So if you are planning any large repair or buying a house, try looking for some of the best mortgage in Chicago and compare them with the fixed home loans.

One the biggest costs of home ownership is the mortgage, the loan you take out to pay for your home. The interest rate is just as important as your down payment and how much you can afford. You’re likely to have a few mortgage specialists recommend you interest rates that are too high for your income level, and you should steer clear of those. The interest rate should be below your average income level. Each mortgage specialist is likely to have his/her own mortgage rate. It is a case of choosing the best mortgage company as opposed to the best interest rate. So, never up and run to the first who offers you the lowest interest rate without shopping it around. It is a major expense under your annual budget and you should shop around. Anyone with a sound of financial stability and a reputation to lose will try his best to give you the best advice with the lowest rates. If you are not convinced, don’t waste your time by dealing with them.