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There are many options if you are looking for a mortgage loan in Illinois. You can find everything from 10 or 30 year fixed or variable interest loans, adjustable rate mortgages (ARM), home equity loans and home equity lines of credit (HELOC). You can find these loans with various reputable lenders for various interest rates, lengths of time and with varying fees.

It is very important to consider the type of loan you need to meet your current financial situation and consider your future needs. There are several things you will need to know before choosing the mortgage loan that is right for you. To understand the costs associated with a mortgage loan it is important to know the rates and types of mortgage loans available in Illinois. Based on the most recent data, mortgage rates for thirty year fixed mortgages are at historic lows, and the amount of points charged varies per lender.

Fixed Rate Mortgage

This is your parent's mortgage loan. Prior to the internet, when most people stayed at the same job until retirement and families weren't as mobile as today; this loan was the epitome of stability. In this loan, the interest rates and payments stay the same for the term of the loan.

Balloon Mortgages

Balloon mortgage loans always seem attractive in the beginning. These loans generally offer a fixed rate for several years. At the end of the fixed rate portion of the loan, payment is due in full. If at the end of the loan you are unable to pay you have few options. You can refinance but you will be subject to current interest rates or you may find yourself in default.

The 5/5 & 5/1 Adjustable Rate Mortgage

This mortgage type offers a stable payment and interest rate for the first five years. In the sixth year the interest rates, and therefore the payments, are adjusted every five years for the 5/5 arm and every year for the 5/1 arm.

Mortgage Refinancing in Illinois

In some instances, refinancing your current mortgage loan can help you lower your mortgage payment. Borrowers can borrow against the equity built up in their home at a lower cost than they can from other sources. Like most mortgage interest, another benefit to mortgage refinancing is that if you pay off credit cards, the interest you pay will now be tax deductible.

Home Equity Loan (or Line of Credit)

A home equity line of credit (or HELOC, as they are commonly referred to) is a mortgage that lets you turn equity into an immediate liquid resource - either cash or credit - allowing you to spend it on home improvements, debt consolidation, college education or other expenses.

The rates and points on each mortgage loan will vary. As with any major consideration, it is imperative to consider all of your options and utilize all of the resources available to make an educated financial decision.

Loan.com is an excellent resource when your goal is to save money and minimize costly errors that could affect you now and in the future. With an assortment of free loan calculators, an in-depth explanation of the Borrower's Bill of Rights and even a Loan Analyzer tool, Loan.com is the first and last stop for the borrower that wants to be informed and up-to-date before choosing a loan. The Rate Directory on Loan.com allow consumers to search for mortgage rates while at the same time flagging those mortgage lenders that abide by the Borrower's Bill of Rights and are in good standing with the Better Business Bureau. You should also use RealEstateABC's ABC Values™ tool to check what the current home values are in Illinois.

Some guidelines when researching and choosing a loan include:

  1. If you are refinancing, know your current interest rate and compare it carefully with the new rate.
  2. Shop for the best rates, not only by newspaper and internet, but by visiting lenders and talking to their loan officers, getting facts, figures and fees in writing so you can take them home and compare them.
  3. Do the math - it might look like you're saving due to a slightly lower interest rate, but the fees and charges might cancel out any potential savings.
  4. If you are refinancing, look at pre-payment penalties on your current loan, they may cost you more than you save on a new loan.
  5. Check tax benefits ;
  6. If you plan to move within 2 to 3 years, you should consider if the savings of a refinance will be enough to justify the time and expense of refinancing.

For the most up to date loan rate, the U.S. Federal Reserve, Freddie Mac, and the Interest Rate Outlook from RealEstateABC.com are exceptional resources.

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