Until recently, subprimes were the answer for unqualified buyers to sign up for a home loan.

As a result of this alleged panacea, one of the nation’s largerst providers of mortgages to high-risk borrowers, has filed for bankruptcy. There has been a surge of defaults in subprimes. More than two dozen subprime lenders have subsequently shut down.

People are attracted to subprime’s initially low payments, which are more attractive than the higher prime rate loans. What is overlooked is the likelyhood that there will be prepayment penalties, a balloon payment, or both.

Adjustable rate mortgages (ARMs) are another insideaous factor. ARMs often make up a large portion of the subprime market. As a result, payments balloon, and suddenly as in a nightmare, are beyond the means of the borrower. Foreclosures are the blossoming result. The borrower has been exposed to a potential fraud.

Only the positive features of mortgage loans are used in advertising. The only means of identifying “subprime” loans is by the interest rates. If they are above market rate, this indicates a risky loan..

So make sure you are ready to buy a house. Don’t enter home ownership with  a subprime loan. Make sure you have a good credit rating and are not in debt.

This is a fine time to purchase a home if you are qualified. Interest rates are low, and pricing is moderating. With a reasonable prime rate loan, the fraud nighmare of subprime loans can be avoided.

Today...

Currently, in the South Bay, there are 304 properties available comprising:

El Segundo: Total 24
Single Family Residences: 15
Median: $1,280,000; Low: $575,000; High: $1,790,000,000
Townhome/Condos: 9
Median: $659,000; Low: $450,000; High: $789,000

Manhattan Beach: Total 117
Single Family Residences: 89
Median: $1,611,750; Low: $969,900; High: $2,495,000
Townhome/Condos: 28
Median: $1,797,000; Low: $700,000; High: $4,950,000

Hermosa Beach: Total 100
Single Family Residences: 54
Median: $1,344,000; Low: $759,000; High: $11,000,000
Townhome/Condos: 46
Median: $1,349,000; Low: $515,000; High: $2,499,000

Redondo Beach South: Total 63
Single Family Residences: 26
Median: $1,144,000; Low: $695,000; High: $2,199,000
Townhome/Condos: 37
Median: $875,000; Low: $369,000; High: $1,625,000

Feel free to contact me if you need help locating property in So. California's beautiful, balmy South Bay: Manhattan Beach, Hermosa Beach, Redondo Beach, El Segundo.