Illinois Mortgage and Refinance Rates
As of Friday, July 30, 2021, current rates in Illinois are 3.02% for a 30-year fixed, 2.31% for a 15-year fixed, and 2.78% for a 5/1 adjustable-rate mortgage (ARM).
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Illinois mortgage overview
Illinois is home to the one of the three most populous cities in the U.S. If you want to move there, now may be a good time to buy a home, with mortgage rates at historic lows. Before you buy, know your options and compare as many mortgage offers as you can to find the best deal.
- Illinois conventional mortgages: Considered the standard, a conventional mortgage can be a good choice if you have fair or good credit. With a credit score of at least 620 and a debt-to-income ratio of 45 percent or less, you’d likely qualify for one. However, you are usually required to make a larger down payment on a conventional mortgage. If it’s less than 20 percent of the home's purchase price, you also may need to pay for private mortgage insurance (PMI).
- Illinois FHA loans: If you don’t qualify for a conventional mortgage, you still have options. Consider FHA loans, which are insured by the Federal Housing Administration (FHA) and require smaller down payments than conventional loans. You only need to put down 3.5 percent if your credit score is 589. If it's as low as 500, you’d need to put down 10 percent— still lower than that of conventional loans.
- Illinois VA loans: If you’ve served your country and are interested in buying a home, consider a VA loan. These are backed by the Department of Veterans Affairs (VA) and help qualifying veterans, active duty service members and their spouses afford homes. VA loans don’t require down payments or PMI; however, you need to pay a VA funding fee, which ranges from 2.3 percent to 3.6 percent of the home’s purchase price. You can get one through a VA-approved lender in Illinois.
First-time homebuyer programs in Illinois
If you’re new to home-buying, the state of Illinois can help make it easier and more affordable. The Illinois Housing Development Authority (IHDA) offers several Illinois first-time homebuyer assistance programs. Many of these include fixed-interest mortgages and down payment assistance loans.
The IHDA runs the Access Mortgage homebuyer assistance program. Through this program, homebuyers have access to various packages which include fixed-rate mortgages, along with different forms of closing cost and down payment assistance.
- IHDA Access Forgivable Mortgage: The IHDA Access Forgivable Mortgage program offers fixed-rate 30-year mortgages via participating lenders. To find the best mortgage lender, the IHDA website has a tool to help you find one in your area. Through this program, you can get 4 percent of the home purchase price, up to $6,000, as a closing cost and down payment assistance loan. You don’t need to pay this loan back as long as you live in the home for at least 10 years. Qualifying for the IHDA Access Forgivable Mortgage requires a minimum credit score of 640. You also need to meet certain income and purchase price limits that vary by county.
- IHDA Access Deferred Mortgage: The IHDA Access Deferred Mortgage program offers a 30-year fixed-rate mortgage through an FHA, VA, USDA or HFA Preferred loan. You can also take out a loan worth 5 percent of the home’s purchase price, up to $7,500, to help you pay for closing costs and down payment assistance. This is an interest-free loan, and you don’t need to pay it back until the end of your loan term, or when you sell your home or refinance your mortgage. To qualify for an IHDA Access Deferred Mortgage, you need a credit score of at least 640. The same income and purchase price limits for the IHDAccess Forgivable Mortgage apply.
- IHDA Access Repayable Mortgage: The IHDA Access Repayable Mortgage program offers a 30-year fixed-rate mortgage. Your loan options include an FHA, VA, USDA or HFA Preferred loan. You also can get a down payment and closing cost assistance loan worth 10 percent of the purchase price, up to $10,000. A credit score of at least 640 is required to qualify. You also have to meet IHDA income and purchase price limits.
Illinois mortgage refinancing
With interest rates at historic lows, you may be able to lower your monthly payment and save thousands by refinancing your loan to a lower rate. You can use Bankrate’s mortgage refinance calculator to see how much you can save.