Overview of Illinois Mortgages
Illinois is home to Chicago, but it’s also known for its rich prairie and miles of farmland. If you’re looking to buy a house in the state’s big city or its more bucolic areas, Illinois mortgage rates tend to reflect the national average fairly well. No Illinois counties have conforming loan limits above the baseline $548,250 limit.
|30 year fixed||3.18%||3.23%||-0.06|
|15 year fixed||2.69%||2.65%||+0.04|
|30 yr fixed mtg refi||3.20%||3.26%||-0.06|
|15 yr fixed mtg refi||2.69%||2.71%||-0.02|
|7/1 ARM refi||3.63%||3.63%||0.00|
|15 yr jumbo fixed mtg refi||3.63%||3.63%||0.00|
National Mortgage Rates
Historical Mortgage Rates in Illinois
Illinois Mortgages Rates Quick Facts
- Median Home Value: $209,100 (U.S. Census Bureau)
- Loan Funding Rate: 54.36% (CFPB)
- Homeownership Rate: 65.1% (St. Louis Fed)
- Median Monthly Homeownership Costs: $1,693 (U.S. Census Bureau)
Illinois is the nation’s sixth-most populous state and has a sizable 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. Average rates in Illinois have been on the rise over the last two years.
A financial advisor in Illinois can help you plan for the homebuying process. Financial advisors can also help with investing and financial plans, including tax, retirement and estate planning, to make sure you are preparing for the future.
Illinois Historic Mortgage Rates*
|Year||Illinois Rate||U.S. Rate|
*The FHFA stopped reporting new data in 2018.
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. For instance, Cook County is one of the nation’s most populous counties. 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, figure out how much you can afford for your monthly mortgage payment and get mortgage pre-approval from a lender.
No county in Illinois has a conforming loan limit over the standard $548,250 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 the baseline number tells you that home prices aren’t as high in the Prairie State as they are in, say, California, New York 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 potentially 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 a fixed 30-year mortgage is 2.73% (Zillow, Jan. 2021).
Illinois Jumbo Loan Rates
In most counties across the country and in every county in Illinois, a loan that’s $548,250 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 30-year fixed jumbo loan rate is 2.58% (Zillow, Jan. 2021).
Illinois ARM Loan Rates
An adjustable-rate mortgage is a loan with an interest rate that 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 once a year for the remainder of your loan term (for most buyers, 15 or 30 years). 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 a 5/1 ARM in Illinois is 3.13% (Zillow, Jan. 2021).
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 1STHomeIllinois 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.
Other programs offered by the IHDA is the IHDAccess Forgivable mortgage, the IHDAccess Deferred mortgage and the IHDAccess Repayable mortgage. All three are available in all Illinois counties. Each loan offers a 30-year fixed-rate mortgage. You can choose to use a VA, FHA, USDA or conventional loan with these options. You can also receive up to $10,000 in down payment or closing cost assistance with the Repayable loan. Maximum household income and purchase price limits vary by county, household size and type of home.
If you find yourself unable to make your mortgage payments, perhaps following a financial hardship, you may be right for the Illinois Hardest Hit Program, which provides assistance to individuals whose income doesn't exceed 120% of the median in the area.
|Resource||Problem or Issue||Who Qualifies|
|Illinois Housing Development Authority||Offers fixed-rate 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).|
|Illinois Hardest Hit Program||Mortgage assistance.||Homeowners who have experienced at least a 15% income reduction following a hardship event and income cannot exceed 120% of area median income.|
Illinois Mortgage Taxes
If you sell your Illinois home you’ll have to pay real estate transfer taxes. There’s a state tax of 0.5%, a county tax of 0.25% and, if you live in Chicago, a local tax of 1.05%.
Once you become a homeowner, 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, 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 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 be saving on your monthly payments.
If you meet the income, credit and purchase price requirements you may be able to refinance through the IHDA’s I-Refi program. As long as you’re current on your mortgage payments, you can qualify for up to $50,000 in federal assistance to help reduce the amount you owe and refinance. IHDA does not process refinance applications. Instead, the organization partners with lenders for the program.
Best Places To Get A Mortgage
SmartAsset’s interactive map highlights the best counties in the U.S. (and in each state) for securing a home mortgage. Hover over states and counties to see rankings and data points for each region, or use the map’s tabs to view the top counties for each of the factors included in our analysis.
Methodology In order to determine the best places in the country to get a mortgage, our study compared four factors, including overall borrowing costs, likelihood of securing a mortgage, property taxes and annual mortgage payments.
To calculate the overall borrowing costs, we analyzed the expected costs throughout the first five years for 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 mortgage originations (secured mortgages) in each county. Annual mortgage payments are a measure of 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, 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 2018 5-Year American Community Survey, Informa, Bankrate, government websites, SmartAsset