EYE ON INTEREST RATES Rates on 30 year mortgages dropped slightly this past week after recently reaching a 2 1/2 year high.  According to mortgage giant, Freddie Mac, rates for 30 year fixed-rate mortgages averaged 6.34% this week, the second highest level since mid-November.  The last time that 30 year mortgages were at such levels was in September of 2003 when rates were at 6.44%. The decrease in rates this week was attributed to lower inflation concerns. One year ago, rates averaged 5.95% Need help getting pre-approved for a loan?  Just call (310)306-6525 x166 or email me at dan@danmayrealestate.com to get started. You'll be surprised how quick and painless it is.

Credit Bureaus to Release New Credit Score            By years end, consumers can look forward to a new credit scoring system, called VantageScore, which was developed by the nations 3 leading credit bureaus and is designed to make it easier to apply for a loan.  Today, three different credit scores, one from each agency, are based on three different scoring models. Under the new VantageScore system, you could still get three different scores, but they'll all be based on the same system which the partnership says will make scoring less confusing.

The system uses a numerical score, like previous systems, but also a letter grading system scoring consumers from A to F. The dominant FICO score ranges from 350 to 850 with no letter grading system. In both cases, generally, the higher the score the more likely you are to qualify for a home loan and the lower the interest rate and better the terms.

The three also said the same VantageScore model will be used across all three companies, but differences in scores can occur when one agency has underlying data that is different from another agency. VantageScore was developed from a national sample of approximately 15 million anonymous consumer credit profiles pulled from across the three major credit reporting companies (five million from each source).

Homeowners Expect Prices to Keep Rising            last weeks LA Times Business section ran an interesting article based on a Bloomberg survey of consumer attitudes.  The article reported that Americans are for the most part optimistic that home values will continue to rise but more are becoming concerned that they will not be able to make their mortgage payments.  The survey found that over 25% of borrowers with Adjustable Rate Mortgages (ARMs) say they are unsure they will be able to make payments if their rates continue to go up. 

In the poll, nearly half of homeowners expected the price of their primary residence to rise 5% to 15% over the next three years. Twenty-five percent expected appreciation of 16% or more in that period. Just 5% predicted no price increase.

The telephone poll surveyed 2,563 adults on their personal finances and their views of financial markets and investment opportunities.

Asked about the short-term trend in house prices, 36% of all respondents — homeowners and renters — expected homes in their neighborhood to increase in the next six months, while 49% expected prices to stay the same. In the West, 43% of respondents predicted rising prices in their neighborhood in the next six months, the highest percentage among the nation's four major regions. The figure was 29% in the Midwest.

About 1 in 7 homeowners said the mortgage on their home was an adjustable-rate rather than a fixed-rate loan. Adjustable-rate loans typically offer low initial interest rates, making homes affordable for many people who couldn't qualify for fixed-rate mortgages.

As market interest rates rise, however, homeowners with adjustable loans face the prospect of sharply higher payments.

 ***** Investors Corner*****

1.  Memphis, TN 8 units 6,272 sq ft building on 16,000 sq. ft. lot in good rental area of Memphis. Building recently rehabbed but in need of more work.  Priced to sell. Built in 1951. $33,600 Scheduled gross income. 15.30% CAP Asking $135,000 Call (310)306-6525 x166 for more details.

2. Las Vegas, NV 8 plex 7,072 sq ft on 8,712 lot close to Las Vegas Convention Center 2 story concrete/block construction built 1963 all units 2 bed 2 bath are rented. 9% CAP $65,000 scheduled gross income.  Asking $650,000. Call (310)306-6525 x166 for more details. 

3. Pasadena, CA 6 units consisting of (1) 3 br, (1) 2br and (4) 1br.  Total Income $60,000 new copper plumbing, refinished h/w floors. 4,357 sq. ft on 11,000 sq. ft. lot asking $919,000 Call (310)306-6525 x166 for more details.

 "Links of the Month” (3) real estate related websites you should visit  

1.  Rent vs. Buy Calculator  -- Use this calculator to determine whether it is a better financial   decision to rent or to own a home.

2.  New Website helps homeowners with free home valuations http://www.zillow.com

3. Federal Citizen Information Center -  the source for FREE consumer information from the General Services Adminstration of the Federal Government.  You will be amazed and the amount and variety of FREE real estate related information that is available.