Subprime mortgages are stil out there. But what are they?
Very simply, they’re loans made to borrowers with a FICO score of 620 or below. What borrowers should be aware of are the dangers of entering into this kind of financial commitment. To begin with, when a subprime loan is made, the rate is considerably higher than the norm. The borrower begins with payments that would surely put stress on the repay schedule. If it is an adjustable rate (ARM) loan—which quite often is the case—the payments may escalate even further as rates go up.
Subprime loans are there as a means of entering the real estate market when usual financing qualifications are not possible. The borrower gains access to a property when not really qualified, and the lender is assigned an exorbitant interest rate.
As was inscribed centuries ago—”Caveat emptor”—Let the buyer beware.
South Bay Real Estate
Whether the press knows it or not, there’s been a fairly healthy amount of activity here this year.
For your interest: Home Sales had a 28.6% increase in this area in February. The most active price category in the four beach cities during February were homes priced from $750,000 to $1 million, with 135 offered for sale, and 45 sold.
Another 115 homes were offered between $1,000,000 and $1.5 million, with 22 sold, while 73 were offered between $500,000 and $750,000 and 34 sold.
Eighty-six homes were offered at $2 million or more during the month of February, with eight selling in that price range.
Median Prices 2007...............Change from March, 2006
Manhattan Beach
SFR - $1,900,000....................-2.6%
Condo - $1,107,000..............+30.2%
Hermosa Beach
SFR - $900,000........................-2.1%
Condo - $894,000...................-20.2%
Redondo Beach
SFR - $999,000........................-0.1%
Condo - $752,000..................+7.4%
El Segundo
SFR - $855,000........................-7.1%
Condo - $630,000..................+35.5%
Hermosa Beach
SFR - $900,000........................-2.1%
Condo - $894,000...................-20.2%
Palos Verdes
SFR - $1,233,000....................-10.4%
Condo - $481,000...................-30.8%
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, Palos Verdes.
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