Below is a list of common Frequently Asked Questions by buyers in Marin County. If you have any questions that you do not see on this list, please contact us and we will get back to you with an answer. Many questions are also answered in our blog.
There are many reasons to buy a home instead of rent. These reasons include:
Alamere Real Estate has created a dedicated section to this question. Many of your questions will be answered here: How to Choose a Realtor. For more detailed information, please contact us.
Much like finding a real estate agent, finding a lender is an important step in buying your home. As with a real estate agent, it is best to use all of the resources available to you including:
To determine your maximum mortgage amount, lenders look at:
A history of paying monthly payments on time indicates you are likely to make mortgage payments on time. Your credit score, (e.g., a FICO score) will be a factor in the kind of mortgage program for which you may qualify but historical credit problems does not always mean that you can’t get a mortgage.
Your credit history can also affect:
If you haven’t done so already, obtain a copy of your credit report through the free service AnnualCreditReport.com. Do not use services such as freecreditreport.com as they will sign you up for “hidden” monthly fees.
A typical down payment in Marin County is 20-25% of the homes value but in today’s environment some homebuyers bay be eligible for down payment assistance and you may be able to buy a home with very low or no down payment. However, loans with down payments of less than 20% typically require mortgage insurance.
It may go down some more but there is no guarantee the home you like in the area you want will be available. Buy what you like and plan to keep it for 3 years and you will be ahead between the write-off on taxes and your peace of mind you receive from being settled.
Generally, closing costs in Marin equal between 1%-2% of the home purchase price.
Closing costs vary based on a variety of factors, but they usually include the following:
Lenders use a variety of items to determine your loan eligibility and your debt-to-income ratio, these factors include:
Once you know your maximum loan amount, it’s up to you to decide if it’s right for you.
There is no typical amount of down payment. The mortgage amount that you qualify for and the monthly payments you feel comfortable with help to determine your down payment. Also, your current age and earning potential can be a factor. Currently at least 20-25% is what the banks like to see but many lenders will work with as little as 3%.
Usually your monthly mortgage payment is made up of four amounts – often referred to as PITI:
An escrow company is attached to a title company in this area and it is a neutral depository for your transaction. They are the third party who handles the legal transfer of all funds and loan documents associated with a transaction. Fees are on a sliding scale and first time home buyers receive a discount.
The best way to match your needs to the perfect loan is to work with an experienced mortgage specialist. Ask your advisor for a Good Faith Estimate (GFE) to get an idea of the type and amount of loans that they offer. Please contact us for a recommendation or review our [Mortgage Section] for clarification on different types of loans.
There is no all-encompassing answer to this question. It is best to speak with your real estate professional regarding your specific situation. Please feel free to ask us our opinion about any specific home or area in Marin County. Our experience throughout previous Marin real estate home pricing cycles will help you in pricing your offer. When your agent or broker is pricing your home, make sure to ask the following questions:
Offers are often rejected but a rejection is often an open invitation to negotiate. If you chose your real estate broker wisely they will be an enormous help here. More money is not always the only option; occasionally you can ask the seller to cover some of the expected repairs and closing costs and incorporate that into another offer. Negotiations often go back and fourth several times before a deal is made.
“Pre-approval” means that you have met with a loan officer, your credit files have been reviewed and the loan officer believes that you can readily qualify for a given loan amount with one or more specific mortgage programs. The lender will them provide you with an approval letter which will show your buying power. See our section on “The Home Buying Process” for more information.
Private Mortgage Insurance (PMI) provides your lender with a way to recoup its investment if you are unable to repay your loan. PMI is usually required when the mortgage amount is higher than 80% of the home’s value.
Discount points are prepaid interest, which you can pay to your lender at closing in exchange for a lower interest rate on your mortgage. Your decision to pay discount points depends on two factors, how long you plan on living in your home and your current financial situation. Please discuss this with your mortgage broker, real estate broker or contact us for more information.
Most mortgage loans have either a fixed interest rate or an adjustable interest rate. Fixed-rate mortgages have an interest rate that never changes and your payments remain stable throughout life. As the name suggests, adjustable-rate mortgages (ARMs) have an interest rate that changes at regular intervals based on a predetermined formula that is based on a market index.
Generally it is best to select a fixed-rate mortgage when you plan to stay in your home long term and/or rates or low and it is best to select an ARM if you plan on staying in your home short-term and/or rates are relatively high.
For help deciding which option is right for you, check GMAC’s Fixed vs. Adjustable calculator
Locking in your interest rate depends largely on the market and where you think rates will go. If you are in a rising interest rate environment then it is usually a good idea to lock in your rates, but it is difficult to predict the market and no one knows for sure which direction interest rates will go at a given point in time. Make sure to keep track of announcements from the Federal Reserve Board as their monetary policies will effect mortgage rates. Please note that if rates drop during the lock-in period you are not allowed to switch to the lower rate.
This site has been created to make buying a home in Marin County easier. You can easily search local MLS listings or browse by community. We have the area’s most advanced search engine for Marin Real Estate. Our users also have the ability to create a login and password and save their searches and preferences. Sign up for your free account on the right hand side of this page. For a more customized search contact us and we can assist you with all of your search requests.
The type of negative credit records determines how long they will stay on your credit report. For example: a bankruptcy remains in your record for 10 years and bills that go to collections remain on your credit 7 years. However, their effect on your score decreases over time. So you don’t have to wait 10 years before considering home ownership. It is important to always think about your credit score and take steps to improve it in order to insure that you will get the best rate at a later date.
Yes, even 100% financing is available.
In the past 20 years, online lending has exploded and local mortgage brokers are now competing with online brokers. Getting a home mortgage or refinancing your is a major financial decision and should be treated as such. Online interest rates that seem “too good to be true” often are and one needs to navigate wisely to avoid scams.
marin_mortgage_300If you do insist on shopping for a mortgage/home loan online, then there are a few factors that you need to be aware of: First, when comparing loans, make sure that you’re comparing loans on an apples-to-apples basis. For example, you find that “Loan A” for a 30-year loan has a much lower interest rate than “Loan B” (also for 30 years). Upon further inspection, you find that “Loan A” is technically an adjustable rate mortgage. Its payment is based on a 30-year amortization, but becomes due through either payment or refinancing at the end of 5 or 7 years. These are frequently referred to as a 5-year or 7-year fixed-rate mortgage. While both said “30-year”, they are not the same type of loan.
Second, you should always ask the lender for a statement detailing all fees associated with the loan. Factors such as “points” (loan fee), interest rate and “garbage fees” (extra fees which some lenders charge) can vary greatly from one lender to another.
You’ve got questions and we can’t wait to answer them.