Overview of Illinois Mortgages
Illinois is home to Chicago, but it’s also known for its rich prairie and its miles of farmland. Illinois mortgage rates tend to reflect the national average. No Illinois counties have conforming loan limits above the baseline $417,000 limit.
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Illinois Mortgage Rates Quick Facts
Historical Mortgage Rates in Illinois
Illinois is the nation’s fifth-most populous state and has a sizeable mortgage market to serve its population of nearly 13 million residents. Illinois mortgage rates are similar to the rates in the rest of the country. 2016 Illinois mortgage rates are on average lower than 2015 Illinois mortgage rates.
Illinois Historic Mortgage Rates
|Year||Illinois Rate||U.S. Rate|
Illinois Mortgages Overview
The process of getting a mortgage in Illinois varies somewhat from county to county. If you’re buying a home in Cook County, Illinois, you’ll probably face steeper competition from other buyers. Cook County is the nation’s second-most populous county, after Los Angeles County. But if you’re buying a home in a rural area of Illinois you’ll probably pay less. Regardless of where you want to start looking for a mortgage, it’s a good idea to work out a budget and get mortgage pre-approval from a lender.
Illinois Mortgage Rates
|Percentage of Homes||79.20%|
|Average Property Value||$169,495.55|
|Percentage of Homes||17.30%|
|Average Property Value||$143,730.99|
|Percentage of Homes||1.80%|
|Average Property Value||$127,112.57|
|Percentage of Homes||1.70%|
|Average Property Value||$169,263.11|
No Illinois counties have a conforming loan limit over the standard $417,000 limit that prevails in most U.S. counties. In some expensive counties in other U.S. states the conforming loan limit is higher in acknowledgment of the fact that home prices are higher across the board. So the fact that Illinois doesn’t have any counties with limits that exceed $417,000 tells you that home prices aren’t as high in the Prairie State as they are in, say, California or Colorado.
Conforming and FHA Loan Limits by County
|County||Conforming Limit||FHA Limit|
The foreclosure process in Illinois is judicial only. Some states allow non-judicial foreclosure, in which a lender can foreclose on a home and sell it at auction without going to court. But in Illinois a judge must order a foreclosure, which means the foreclosure process in Illinois tends to take longer than it does in states that allow non-judicial foreclosure.
If you’re behind on your Illinois mortgage payments and your lender decides to take action you will receive a complaint and a summons giving you 30 days to respond. Regardless of your circumstances it’s a good idea to respond because if you do not, the lender can get a default order that means you’ve lost the case. If you respond, your case can go to trial or the lender can seek a motion for summary judgment.
Another option if you’re facing foreclosure in Illinois is foreclosure mediation. It’s only available in some Illinois counties. If it’s available in your county and you choose to take advantage of the program you will sit down with your lender and a neutral third party to work out a plan that will help you to stay in your home, or to leave the home without going through the traumatic and credit-ruining process of foreclosure. Details and participation requirements vary by Illinois county.
30-Year Fixed Mortgage Rates in Illinois
The garden-variety mortgage is the 30-year fixed-rate mortgage. You know where you stand with that kind of mortgage. You have 30 years to repay the home loan and the interest rate you pay won’t change unless you refinance. That means your monthly payments won’t change either (unless you make extra payments).
With a 30-year fixed-rate mortgage you can predict 30 years of monthly mortgage payments that will be the same for that whole stretch of time. The difference will be that as you pay back the loan more of each payment will go toward equity and less toward interest. This process is called loan amortization.
The average Illinois mortgage rate for fixed-rate 30-year mortgages is 4.06%.
Illinois Jumbo Loan Rates
In most counties across the country and in every county in Illinois, a loan that’s $417,000 or less is a “conforming loan.” That means the loan can be sold on the secondary market and is eligible for normal interest rates. A loan that exceeds the conforming loan limit in a given county is called a “jumbo loan” and generally comes with a higher interest rate. From the lender’s perspective, the higher interest rate on the jumbo loan is fair compensation for the added risk of lending you extra money.
The average Illinois jumbo loan rate is 3.86%.
Illinois ARM Loan Rates
What’s an adjustable-rate mortgage? It’s a mortgage whose interest rate can change during the mortgage term. An adjustable-rate mortgage (ARM) generally entices customers with an introductory interest rate that’s lower than the prevailing interest rate for fixed-rate mortgages. That introductory rate can last for a period of between one and 10 years.
After the introductory period, your rate can jump, and it can adjust more than once during the loan term. Your ARM mortgage documents will specify how long the introductory period lasts, how many times and when the interest rate can jump, as well as a maximum cap on the interest rate increase. If you think you’ll sell the home before the low-rate introductory period ends, an ARM might be a good way to get a deal on your mortgage.
The average rate for an ARM in Illinois is 2.5%.
Illinois Mortgage Resources
Illinois offers help for people who want to buy or keep a home. The Illinois Housing Development Authority (IHDA) offers something called 1ST Home Illinois in Boone, Cook, DeKalb, Fulton, Kane, Marion, McHenry, St. Claire, Will and Winnebago counties. With a 1ST Home Illinois loan you’ll get a 30-year fixed-rate mortgage, plus a $7,500 down payment assistance grant.
If you’re a first-time homebuyer, a veteran or someone who hasn’t owned a home in the last three years, you may be eligible. You can use a conventional loan when participating in the program, or a VA, FHA or USDA loan. You must contribute $1,000 or 1% of the purchase price of the home, whichever is greater. You’ll have to complete homeownership counseling and meet the program’s credit requirements. Income and purchase price limits vary by county.
Another program offered by the IHDA is the HomeIllinois mortgage. It’s available in all Illinois counties. With HomeIllinois you get a 30-year fixed-rate mortgage that requires a homebuyer contribution of $1,000 or 1% of the purchase price, whichever is greater. You can choose to use a VA, FHA, USDA or conventional loan with the HomeIllinois mortgage. You can also receive up to $5,000 in down payment or closing cost assistance, a federal tax credit certificate and lender-paid mortgage insurance. Maximum household income and purchase price limits vary by county, household size and type of home.
|Resource||Problem or Issue||Who Qualifies||Website|
|Illinois Housing Development Authority||Offers loans, down payment assistance, closing cost assistance, a federal tax credit and lender-paid mortgage insurance and refinancing.||Homebuyers who fall under income thresholds. To qualify for a loan, you need a credit score of at least 640 (660 in some cases).||https://www.ihda.org/|
|Home Affordable Refinance Program||Refinancing.||Single family homes and condos that fit within lending loan limits.||http://www.harp.gov/|
|Illinois Hardest Hit Program||Mortgage assistance.||Homeowners who have experienced at least a 15% income reduction following a hardship event.||https://www.illinoishardesthit.org/|
If you’re a repeat homebuyer looking to move within Illinois you may still be able to get a HomeIllinois mortgage, complete with a 30-year fixed-rate loan, lender-paid mortgage insurance and up to $5,000 to use for your down payment or closing costs. Income and purchase price limits are the same as for first-time buyers, and you must put $1,000 or 1% of the purchase price down yourself (whichever is greater). It’s unusual for state housing authorities to provide this kind of assistance for those who aren’t first-time homebuyers, so it’s worth considering if you’re in Illinois and meet the requirements.
Illinois Mortgage Taxes
If you sell your Illinois home you’ll have to pay real estate transfer taxes. There’s a state tax of 0.1%, a county tax of 0.05% and, if you live in Chicago, a local tax of 1.05%.
If you’re this far along in the homebuying process you probably know that you can deduct your mortgage interest from your federal income taxes. You can’t however, deduct that interest on your Illinois state income taxes, as you can in some states.
Illinois Mortgage Refinance
When it’s time to refinance your Illinois mortgage you can work with the same lender or shop around to see if you can find a lender who will offer you a lower interest rate and/or more favorable loan terms. Remember that when you refinance you’re getting a new loan. That means paying closing costs and other homebuying fees all over again. So, if you’re not planning to stay in your home for much longer, refinancing may cost you more than you’ll saving on your monthly payments.
If you meet the income, credit and purchase price requirements you may be able to refinance through the HomeIllinois Refinance program of the IHDA. It’s available to those who meet the requirements, are willing to complete homeownership counseling and live in the home as their primary residence. An IHDA participating lender can talk you through the options and help you figure out if refinancing is right for you.
See Mortgage Rates in These Other States
Best Places To Get A Mortgage
SmartAsset’s interactive mortgage map highlights the best counties in the country (and in each state) for securing a mortgage. Hover over counties and states to see data points for each region, or use the map’s tabs to view the top counties for each of the factors driving our analysis.
Methodology For many people buying a house means securing a mortgage. To determine the best places in the country to get a mortgage we looked at four factors: overall borrowing costs, ease of securing a mortgage, cheap property taxes and cheap annual mortgage payments.
To calculate the overall borrowing costs, we looked at the expected costs over the first five years of a $200,000 mortgage with a 20% down payment, including closing costs. We calculated the ease of getting a mortgage as the ratio of mortgage applications to actual mortgage originations (secured mortgages) in each county. We based annual mortgage payments on the annual principal and interest payments for a $200,000 loan in that location, using average mortgage rates in each county.
Finally, we ranked locations based on these four factors, and then averaged those rankings, giving equal weight to each factor. The areas with the lowest average rankings are the best places to get a mortgage.
Sources: Mortgage Bankers Association, US Census Bureau 2015 5-Year American Community Survey, Informa, Bankrate, government websites, SmartAsset