Affordable townhome in South Redondo just blocks to the Pier and beach..

Public Open House: Sunday 1-4 pm

This is a delightful home with hardwood floors and a new kitchen. There are 2 bedrooms.. each with private bath. The upper level features a "great room" style living area and a powder room.. The kitchen has been totally remodeled with granite counters and tile floors. Each bedroom has a private patio and there are two additional decks off the living room and kitchen.

The property is priced to sell at $624,500.

Please join me Sunday to view this wonderful home. For a private viewing please call me at 310-721-7438 or e-mail me.

During election years it's often hard to put aside our ideologies aside as our passions are engaged by the candidates. This weekend is more then time off from school or work. This is the time we have set aside to honor and remember those who have died in the service of their country.

We have lost a number of our young people to war over the years. For my generation it was Vietnam that took so many lives. Today it is Iraq. It doesn't matter what party your identify with or your stance on the war. Memorial Day is a day to remember all who died in the service of their country.

Last March the government finally agreed to increase the conforming loan limit from $417,000 to $729, 750 for higher priced areas. For a short time it looked as if Manhattan Beach and the Beach Cities along with other high priced California markets and those in other states would finally get a break on mortgages and possibly mortgage rates. The increase in conforming loan amounts would make it easier for a people to refinance and to purchase. Higher conforming rates made a lot of sense to my clients who are buying homes in Manhattan beach and the Beach Cities.

If you are looking for one of those loans.. forget it! At this point you probably have a better chance of winning the lottery then getting a jumbo loan with a decent interest rate. Lenders claim there is just too much risk but I dont really buy that little scenario. Oh, dont get me wrong I know lenders need to be compensated for risk but if the FED is backing the loans then the risk should be acceptable if these loans also have a high down payment. Even if banks charged 1% over current the lower conforming rate it would be better then we are now seeing in the market.

Nope¦ lenders cant possibly make jumbo loans at anything less then very high interest rates¦ unless of course you would be willing to take a short term adjustable rate. That they can do¦ at a pretty decent rate. Hmmm¦Isnt pushing adjustable rates over fixed rates one of the things that got them into trouble in the first place?

We are seeing a little light at the end of the tunnel on foreclosures. One of the things the FED has managed by lowering the discount rate is to lower the prime rate. A number of loans that are and will be soon re-adjusting will do so at a lower rate then they would have even four months ago. This will diminish a number of foreclosures that might have happened. With the tougher underwriting guidelines and higher down payments new jumbo loans are probably a better bet then the conforming loans lenders were jumping all over themselves to make a few years ago. So why dont lenders want to make these loans¦.

I have a theory¦ I dont think it has as much to do with the amount of the loan as it does with the fact that lenders know rates are going to go up and dont want to be stuck with a 6%..30 year fixed rate loan¦ on large amounts of money. I think lenders would like to do away with fixed rate jumbo loans and instead do 10 year adjustable loans in the expectation you will refinance in about 7 years and they wont be stuck with 30 year low fixed rate loans. If rates jump to 8-9% in the future who wants to be stuck with a bunch of 6% loans.

Lenders talk a good story but the truth is they dont like 30 year fixed rate loans. They have always made it far harder to get a fixed rate loan then an adjustable. I have never understood the rational that makes it harder to qualify for a loan that has the same payment over the life of the loan. Whereas an adjustable with a payment that continually changes is far easier to obtain. This has never made sense to me. It seems far less risky to make a fixed rate loan.

Anyway¦ thats my theory.. and Im sticking to it..

If you are thinking about buying or selling a home in Manhattan Beach or any of the Beach Cities but are a little unsure about the current credit market here are a few old ideas that may be worth considering. Interest rates were not always 6 % with lenders jumping all over themselves to hand out money. There was a time when lenders thought piggybacking was a game you played with your kids. The fact is that if you want to sell a home or buy a home there are a number of things you can do to make it happen. None are illegal, immoral or fattening… so now might be a good time to think outside the box.

 Seller Financing: Back in the dark ages sellers used to offer to carry back a second TD for buyers who had a good down payment, good credit and needed a little extra cash to make the deal go. This may not be practical if you need all your cash to buy a new home but there are a number of sellers who don’t need all the proceeds from a sale. The benefits are good for both sides… buyer and seller… If a seller carries back some of the proceeds in the form of a note he may avoid capital gains on that money until he actually receives the money. This is referred to as an installment sale. For a buyer who has a good down (20% +) but needs a bit more to stretch from a conforming first to the sale price this may be a far better option then a lender second at a high adjustable rate. Historically most seller financing was a bit below lender rates but significantly higher then they would make in the bank. If you have a lot of equity that you won’t need but would like to sell forget offering a car.. instead offer to carry back 10% -15% of the price as a second Trust Deed and you just might find a buyer. I believe that as secondary financing becomes more difficult to obtain this may be a good compromise for all parties.

 Pay Points on a Loan: It has only been in the last 6-8 years that buyers thought paying points (a point is typically 1% of the loan amount) on a loan was a bad thing. It used to be very common on a purchase money loan for the buyer to pay 1 or 2 points upfront to get a better rate. As rates got less expensive and you could get a fixed rate zero point loan under 6%… this practice stopped. But in today’s real estate market it might make some sense to reconsider paying a point to get a lower rate. On a purchase money loan the points paid upfront are treated like interest and you can write the amount off on your taxes in the first year of your purchase. This is not the case if you refinance. If you refinance the points can only be written off over the term of the contract.. that is if you have a 30 year loan then you have to write the points off over 30 years. You need to do the math to see if this makes sense but if you are planning to be in your home for 5+ years then it may well be a good choice to pay points upfront…. especially if you are going to choose a fixed rate loan.

Sellers Pay Buyer Closing Costs: This is a concept that we haven’t seen for sometime but it could make the difference for a buyer who is trying to choose between two homes. Also as the FHA and the Conforming loan limit have increased to $729,750 there will be a number of buyers who want to use FHA financing. FHA requires the Seller to pay part of the closing costs. If you have a home valued under $725,000 and it’s not selling you might want to consider offering to sell FHA. A qualified buyer only needs 3% down so you could open your home up to a number of potential buyers who don’t have 10% or 20% down. FHA is also a good tool for those who may need to refinance.

Have questions feel free to e-mail  me… I’m always happy to answer any questions.