How much home a buyer can afford and the type of mortgage needed depends on the specific locale in Los Angeles County and the buyer's unique circumstances. From first time home buyers with low credit to older couples downsizing, the needs vary greatly in the Los Angeles real estate market.
Median home prices in Los Angeles County and average interest rates have grown from approximately $325,000 and 3.5 percent to $410,000 and 4.5 percent between July 2012 and July 2013, according to recent updates on real estate researcher and broker Redfin.com.
Looking at overall numbers can be misleading and not help buyers understand local neighborhood trends.
Mortgage broker Richard White told me he lives in the Mount Washington area just north and east of downtown LA and witnessed dramatic shifts in the past year.
"Home values rose 64 percent from the 2nd quarter of 2012 to the 2nd quarter of 2013 around my house, but in the Los Feliz area to the north values only rose about 5 percent."
Richard said one variable were higher end properties in Los Feliz that did not appreciate at the same rate as the homes around Mount Washington that are priced from $500,000 and higher. Home buyers need to research specific zip codes.
"There is a need to customize a mortgage based on many factors. The home price and interest rate in one area of LA County may not work in another area. Low credit scores in the 500s, intermediate ARMs (adjustable rate mortgages) for home buyers looking to move within 7 years, and reverse mortgages are some of the custom solutions that may be needed."
Richard said as a banker-broker he gets requests from all age ranges, income levels, and personal situations and there is not one trend to pinpoint in the LA market.
"Home buyers who go to banks will find standard products via Fannie, Freddie, and some portfolio products. Banker-brokers are positioned to work in a range of markets since we have more options to utilize assets like retirement portfolios, work directly with investors, or explore programs based on credit scores."
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