Financing a New Home in Chicago

Chicago is the largest city in the state of Illinois anddepending on the interest rates, whether they are
also the third most populated city in the Unitedlowered or raised each month, your monthly
States of America, with almost 3 million people.mortgage payments will also change accordingly.
Chicago is located along the southwestern shore ofWhen financing your new Chicago home through a
Lake Michigan and when combined with its suburbsloan, no matter if it is adjustable or fixed rate, you
and the nine surrounding counties in Illinois, thehave to consider the length of the loan, in terms of
metropolitan area known as Chicagolandhow long you finance your home. The most common
encompasses a population of 9.4 million. Nowadaysterms are 15, 25, 30, 40 and now even 50 year
Chicago is known as a major transportation, business,mortgages in some areas. Of course, the longer the
and architectural center of the US and it is theperiod the more you will pay in interest over the
economic, business, financial and cultural capital of theduration of the loan.
Midwest. The Chicago area is moderately expensive;With a FHA home loan you can purchase a single
the home price median here is nearer the nationalfamily home, condo, house, or apartment in one of
median than homes in spots such as New York City.the neighborhoods in Chicago. This FHA home loan is
Buyers can probably spend about three times theirmostly used by first time home buyers because it
incomes, depending on the part of the area whereallows the purchase of a home with a lower down
they're house-hunting.payment, in some cases as low as 3%. This form of
Chicago's suburban real estate market is as vibrant asnew home financing requires you to have a good
the city itself. The suburbs have developed bothcredit history and enough income to cover the loan
commercial as well as residential real estate at aand your other financial obligations.
tremendous pace. A large number of properties areThe Chicago City Mortgage program offers qualified
always available for purchase in Chicago's suburbanfirst-time homebuyers 30-year, fixed-interest
areas such as Lake County, Kane and DeKalbmortgages at competitive interest rates and a gift of
counties and DuPage and Will counties. There are real4 percent of the mortgage amount to cover down
estate firms that specialize in one of the suburbs,payment and closing costs.
while others deal with all of them. When financing aOne of the most important things to do when
new home in Chicago, have in mind that the realsearching for a way to finance the purchase of a
estate prices are high. Northern suburbs arenew home is to do the math and find out how much
considered "elite".money you can spend on it each month. The rule is
There are many ways to finance a new home inthat all of your housing costs each month, including
Chicago. It all depends on your credit history, thehouse note, property taxes and insurance cannot
price of the property and your income. The nextexceed 29% of your gross monthly income. In
paragraphs give brief explanations on some of theaddition to that, your housing costs plus your other
methods for financing a new home in the city ofmonthly long-term debt should not exceed 41% of
Chicago.your gross monthly income. Furthermore, you must
The first thing to understand is the differenceget a copy of your credit report and check your
between a variable, or adjustable interest ratecredit score. Having a bad credit score, or one lower
mortgage and a fixed rate mortgage. With a fixedthan 580, means that you will have problems with
rate mortgage, the monthly payments remain theobtaining the loan in the first place, not to mention
same over the period of the loan. The adjustablethat you will be forced into paying higher interest
rate mortgage has a lower introductory interest rate,rates.
but it may vary over the duration of your loan. So