Today's Rates In Illinois
May 07 2021
May 07 2021
May 07 2021
Illinois Home Loans
In 2021, the average interest rate for Illinois 30-year mortgages is expected to be around 3.00% through the year. Current IL mortgage rates for some of the most popular home loan options are listed above. If you're like most homebuyers and homeowners, the 30-year mortgage rates for Illinois will probably be of most interest to you.
- The 15-year mortgage rates are a popular choice for those who are refinancing. Reducing to a shorter term loan saves thousands in interest.
Adjustable-rate mortgages (ARMs) can be a good choice for borrower’s who don't plan on staying in a home for more than a few years. Savvy borrowers, who know how to take advantage of the low start rate and limit the future risk, may benefit the most.
Knowing what the current IL mortgage rates is a good place to start, but there's more to shopping for a home loan than that.
- Illinois mortgage rates vary from borrower to borrower, depending on credit scores, percentage of down payment, loan amount and other factors. Rates also vary from lender to lender, so it's important to shop around and know how to compare loan offers to get the best deal.
We have the information and tools you need to be an educated home loan shopper, whether you're looking to buy, refinance or take out a home equity loan. We provide informative articles on just about every aspect of home loans. Check our lender listings of Illinois mortgage rates and use our mortgage calculators to figure out the costs of a loan. Illinois mortgage lenders are ready to offer you their best deals.
Here are some general tips to get you started:
- Don't focus solely on the mortgage rate. Closing costs can have a big impact on the overall cost of a mortgage. The lowest rate is not necessarily the best deal, particularly if the rate includes discount points.
- The annual percentage rate (APR) helps you compare mortgages that have different closing costs, and are often a better indicator of the cost of a home loan than the mortgage rate itself.
- Not all Illinois home loan programs are the same. An experienced good loan officer will help you select the one that's best for you. That may be an FHA loan, a conventional mortgage backed by Fannie Mae or Freddie Mac, VA mortgage or perhaps a Jumbo product. Or choose between a home equity loan, a HELOC or a cash-out refinance to borrow money.
An FHA loan is the classic mortgage for a first-time homebuyer or anyone else with limited finances or less-than-ideal credit. FHA loan requirements in Illinois allow you to get a loan with as little as 3.5 percent down. Furthermore, you don't have to pay a higher rate just because you're making a small down payment or have a lower FICO score (as you would on a conventional loan).
- For 2021, the maximum FHA loan limit in Illinois is $356,362 for a single-family home and $729,800 for a four-unit. Limits can vary by county.
While some first-time homebuyers might think it would be better to save up a larger down payment, an Illinois FHA loan allows you to start building equity immediately rather than spending that money on rent.
- Closings costs can be a little higher on FHA loans than conventional ones, so that's where a mortgage calculator comes in handy, so you can compare the costs and savings of the two types of loans over time.
30-Year vs. 15-Year Mortgage Rates
These are the two main payment options for fixed-rate loans, though other lengths such as 10- or 20-years are available as well. But the big difference is this: 30-year mortgages are generally used for home purchases, while 15-year loans are primarily used for refinancing.
- 30-year mortgage rates in Illinois are usually higher than 15-year rates. The difference is often about a half a percentage point.
The difference in what you pay in interest is significant. That's because you pay off the 15-year loan twice as fast, so you aren't paying interest for nearly as long, and the loan balance against which interest charges are calculated, is paid down much more quickly.
A 30-year mortgage gives you smaller monthly loan payments but you're paying less against mortgage principle each month.
- Many Illinois homeowners will choose to refinance into a 15-year loan to cut several years off their loan with little to no increase in monthly payments due to the lower 15-year mortgage rates.
It can be tempting to refinance with 30-year mortgage rates, as the longer loan can result in significantly lower monthly payments. But beware – doing so means stretching your loan back out to a new 30 years, postponing the day you pay off the loan in full and saddling you with a big increase in overall interest costs as a result.
FAQ: Depending on loan size, many are able to refinance to a payment for a shorter term mortgage that is similar to your 30 year term payment (because of the drop in rate).
Illinois Home Equity Loans
Existing homeowners in 2021 who need to raise cash for a one-time expense might look into home equity loans, HELOCs or cash-out refinance mortgages. All are a form of borrowing against your home equity, though with significant differences.
With a standard home equity loan, you borrow a sum of money and immediately begin paying it back. They are usually fixed-rate loans, though you can get them with adjustable rates as well.
- Home Equity Loan & HELOC Payment Calculator.
A home equity line of credit, or HELOC works like a credit card secured by your home equity. You're given a line of credit you can draw against as needed, up to a predetermined limit. Illinois HELOC rates are usually lower than for standard home equity because they are set up as adjustable-rate loans, though the rates can adjust higher over time.
A cash-out refinance is when you refinance your mortgage for a higher amount than you currently owe and receive the difference in cash.
- Illinois home refinance rates are usually lower than rates on home equity loans, but closing costs are greater because you're refinancing the whole mortgage.
A cash-out refinance works best if you're borrowing a large sum or if Illinois refinance mortgage rates are lower than the rate you're currently paying.
Comparing Mortgages and Jumbo Loans
Jumbo mortgage loan limits for 2021 in Illinois is $548,250 up from $510,400 in 2020. If your loan balance falls between these two numbers you may want to consider refinancing to secure a lower conforming interest rate.
- What is a jumbo loan? Fannie Mae, Freddie Mac, and their regulator, the Federal Housing Finance Agency (FHFA), set a maximum amount for loans that they will buy from lenders. In 2021 this amount is any amount below $548,250
You can find qualified Illinois brokers in our broker directory. Be willing to consult with several so that you have a few different offers to compare. Prepare for these consultations by considering the following:
- How much loan you can afford? This is more complicated than it sounds, because how much you can afford depends on what type of mortgage or refinance you're considering. If you aren't sure, visit our mortgage calculators to test different mortgage rates, amounts, and loan types.
- How long you plan to own the home. This could determine whether an ARM is more appropriate than a fixed-rate mortgage (FRM), or vice versa.
- Any potential changes to your income level.
You'll also benefit by knowing how market rates differ for the various loan types. For example:
- ARMs usually start with a lower rate than FRMs.
- Second mortgages have higher rates than refinances.
- Mortgages with shorter amortization periods have lower rates than the same loans with longer amortization periods.