Buyer FAQ

Why should I buy, instead of rent?

There are many reasons to buy a home instead of rent.  These reasons include:

• Pride of Ownership
• Appreciation
• Mortgage Interest Deductions
• Property Tax Deductions
• Capital Gain Exclusion
• Preferential Tax Treatment
• Mortgage Reduction Builds Equity
• Equity Loans
• Please review our Marin County Buyers Guide for more information

Should I use a real estate broker? How do I find one?

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.

How do I find a lender?

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:

• Friend recommendations
• Office awards and accolades
• Real estate agent recommendations
• Internet recommendations
• Contact us for a Marin County mortgage broker recommendation

How much do I need for a down payment?

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.

Should I wait until the market goes down?

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.

What are and how much are closing costs in Marin County?

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:

• Lender fees:  Your mortgage company may charge for expenses related to making the loan, including an appraisal fee, a credit report fee, origination points, and discount points.
• Third party fees:  Charges for services not provided by your lender often include the settlement fee, title insurance, and attorney’s fees.  
• Prepaid items:  This is the largest closing cost. Certain mortgage costs must be paid to your lender in advance. The most common of these are pre-paid interest, hazard insurance, and deposits to set up an escrow account.  Some of these fees can be financed.

How does an escrow account typically work in Marin?

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.

Which type of loan is right for me?

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.

When I find the home I want, how much should I offer in this market?

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:

• What are comparable homes asking price and historical selling prices?
• How is the condition of the home?
• How long the home has the home been on the market?
• Have there been any recent price reductions?
• How much you can afford?
• How much you really want the home?

Should I pay discount points / Should I “buy down” my rate?

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. 

Should I choose a fixed-rate or adjustable-rate loan?

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

Should I lock my mortgage rate?

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.

Marin County Mortgage & Home Loan Information

Review of Online Lending and Mortgage Websites and Services

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.