Home Buying

Buying a Home? Know the Warning Signs of Foundation Damage

Warning Signs of Foundation ProblemsFoundation damage can be a serious problem for a house. If you're a home buyer, knowing the signs of foundation damage can help you decide whether your Bolinas home is in need of repair.

Cracks in the Foundation

Cracks in the foundation can be one of the most obvious signs of foundation damage. The worst cracks are usually stair-step shaped cracks in the mortar and deep, horizontal cracks in the foundation. Horizontal cracks are an indication that the soil outside the house has pushed on the foundation, causing it to break. This can happen when wet soil freezes and expands. Some types of soil are known to expand when wet and shrink when dry, which can also cause problems for the home's foundation.

Bulging Walls

A bulging wall is almost always a sign of a very serious problem. Bulging basement walls are typically an indication that the soil is pushing on the foundation, while bulging walls above the soil line are indications that the foundation has shifted.

Often, bulging walls are accompanied by water problems. Look for water stains, mold, mildew and beads of moisture around the cracks and bulges. This happens because water can intrude at the site of foundation and wall cracks. Sometimes this happens because water itself is...

The New Tax Bill and Home Ownership

With the passage of the new tax bill, many questions exist regarding what impact the new bill is likely to have on the residential real estate market including exisitng homeowners, home buyers as well as sellers. 

 Below is an outline of three most pressing items (Mortgage Interest Deduction, Property Taxes and State & Local Taxes (SALT) and Exclusion of Gain on Sale of a Principal Residence) that real estate practitioners watched carefully as the bill became law as well as some industry commentary regarding the potential implications of the new tax law on the real estate market.

DISCLAIMER: As you review this summary, please keep in mind that this post is not meant to be a resource for tax advice but instead a resource for basic information regarding aspects of the new tax code and how it may impact the real estate market. We encourage our clients to speak to a tax professional or financial planner regarding their specific situation and how the entire tax code will affect their personal returns.

Here are the 3 Major Concerns of Real Estate Practitioners as it relates to the new tax bill.

1.  Mortgage Interest Deduction

There was concern that the mortgage interest deduction (MID) would be eliminated. That didn’t happen.

However, the bill has made the following changes:

  • Reduces limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/17 (from the existing $1,000,000). Current loans up to $1 million are grandfathered.
  • Homeowners may refinance mortgage debts existing on 12/14/17 up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount refinanced.
  • Repeals deduction for interest paid on...

The Benefits of Homeownership Go Beyond the Financial

The Benefits of Homeownership Go Beyond the Financial | MyKCM

Homeownership is a major part of the American Dream. As evidence of that, 91% of Americans believe that owning a home is either essential (43%) or important (48%) to achieving that “dream.” In a market where some people may be unsure about the benefits and possibilities of buying a home, it is important that we remember this.

Homeownership is NOT just about the money. In fact, some of the major benefits are non-financial. Here are a few of those benefits as per the National Association of Realtors:

  • Consistent findings show that homeownership does make a significant positive impact on educational achievement.
  • Several researchers have found that homeowners tend to be more involved in their communities than renters.
  • Early studies of homeownership and health outcomes found that homeowners and children of homeowners are generally happier and healthier than non-owners, even after controlling for factors such as income and education levels that are also associated with positive health outcomes and positively correlated with homeownership.

Bottom Line

Homeownership means something more to people and their families than just the financial considerations.

Contact the Marin Modern Team, your Marin County real estate connection, for assistance buying or selling a...

Before You Make an Offer, Here Are 4 Tips for Success!

Before You Make an Offer, Here Are 4 Tips for Success! | MyKCM

So, you’ve been searching for that perfect house to call a ‘home,’ and you finally found it! The price is right, and in such a competitive market, you want to make sure that you make a good offer so that you can guarantee that your dream of making this house yours comes true!

Freddie Mac covered “4 Tips for Making an Offer” in their Executive Perspective. Here are the 4 tips they covered along with some additional information for your consideration:

1. Understand How Much You Can Afford

“While it’s not nearly as fun as house hunting, fully understanding your finances is critical in making an offer.”

This ‘tip’ or ‘step’ should really take place before you start your home search process.

Getting ...

Bubble Alert! Is it Getting Too Easy to Get a Mortgage?

Bubble Alert! Is it Getting Too Easy to Get a Mortgage? | MyKCM

There is little doubt that it is easier to get a home mortgage today than it was last year. The Mortgage Credit Availability Index (MCAI), published by the Mortgage Bankers Association, shows that mortgage credit has become more available in each of the last several years. In fact, in just the last year:

  • More buyers are putting less than 20% down to purchase a home
  • The average credit score on closed mortgages is lower
  • More low-down-payment programs have been introduced

This has some people worrying that we are returning to the lax lending standards which led to the boom and bust that real estate experienced ten years ago. Let’s alleviate some of that concern.

The graph below shows the MCAI going back to the boom years of 2004-2005. The higher the graph line, the easier it was to get a mortgage.

Bubble Alert! Is it Getting Too Easy to Get a Mortgage? | MyKCM

As you can see, lending standards were much more lenient from 2004 to 2007. Though it has gradually become...

Mortgage Interest Rates Are Going Up... Should I Wait to Buy?

Mortgage interest rates, as reported by Freddie Mac, have increased over the last several weeks. Freddie Mac, along with Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors, is calling for mortgage rates to continue to rise over the next four quarters.

This has caused some purchasers to lament the fact that they may no longer be able to get a rate below 3.5%. However, we must realize that current rates are still at historic lows.

Here is a chart showing the average mortgage interest rate over the last several decades:

ortgage Interest Rates Are Going Up… Should I Wait to Buy? | MyKCM

Bottom Line

Though you may have...

5 Reasons Homeownership Makes 'Cents'

 Reasons Homeownership Makes ‘Cents’ | MyKCM

The American Dream of homeownership is alive and well. Recent reports show that the US homeownership rate has rebounded from recent lows and is headed in the right direction. The personal reasons to own differ for each buyer, but there are many basic similarities.

Today we want to talk about the top 5 financial reasons you should own your own home.

  1. Homeownership is a form of forced savings – Paying your mortgage each month allows you to build equity in your home that you can tap into later in life for renovations, to pay off high-interest credit card debt, or even send a child to college. As a renter, you guarantee that your landlord is the person with that equity.
  2. Homeownership provides tax savings – One way to save on taxes is to own your own home....

What Is The Contingency Period? An FAQ for Home Buyers

All About the Contingency PeriodOne of the parts of the home buying process is the contingency period. Knowing what the contingency period is and what your role is during the contingency period can help you purchase the home you want.

The contingency period is a period of time that occurs an offer has been accepted and before the close of escrow. The period begins on the day that the offer is accepted, and ends on whatever day is listed in the contract paperwork. During the contingency period, the home buyer is allowed to inspect the home for problems and decide whether or not to proceed with the sale of your dream Port Reyes Station home.

What Can Be Done During the Contingency Period?

The type of inspections that a home buyer chooses to perform during the contingency period depends on the home buyer. Most home buyers choose to get a standard home inspection performed by a certified home inspector. During the standard home inspection, the inspector will look at various systems in the home such as:

  • Plumbing
  • Roofing
  • Electrical
  • Appliances
  • Flooring

In addition to the standard home inspections, many home buyers will also choose to get specialized inspections. For example, home buyers may also decide to have the home inspected for termites. This is not included as a standard part of...

Don't Let Fear Stop You from Applying for a Mortgage

Don't Let Fear Stop You from Applying for a Mortgage | MyKCM

A considerable number of potential buyers shy away from jumping into the real estate market due to their uncertainty about the buying process. A specific cause for concern tends to be mortgage qualification.

For many, the mortgage process can be scary, but it doesn’t have to be!

In order to qualify in today’s market, you’ll need to have saved for a down payment (73% of all buyers made a down payment of less than 20%, with many buyers putting down 3% or less), a stable income and good credit history.

Throughout the entire home buying process, you will interact with many different professionals, all of whom perform necessary roles. These professionals are also valuable resources for you.

Once you’re ready to apply, here are 5 easy steps that Freddie Mac suggests you follow:

  1. Find out your current credit history & score – even if you don’t have perfect credit, you may already qualify for a loan. The average FICO® Score of all closed loans in September was 724, according to Ellie Mae.
  2. Start gathering all your documentation – income verification...

Understanding PMI: What You Need to Know

What You Should Know About PMIPMI, or Private Mortgage Insurance, is required for home buyers who are seeking a mortgage but who may not have 20 percent to put down. This insurance is not for the buyer, but for the lender who is providing the mortgage. Because the buyer has a small down payment, the mortgage company wants to make sure they are covered if the buyer does not make their mortgage payments. But what is PMI, really, and how does it work? Understanding it can help any buyer determine whether they need this extra insurance, and how they can get the best deal on it so they pay as little extra as possible on their mortgage.

Private Mortgage Insurance is for Low-Down-Payment Buyers

Buyers who have a down payment amount under 20 percent are generally the ones who are asked to pay PMI. That does not mean this requirement will not be waived for a particular buyer under specific circumstances or with certain lenders. The PMI rule is a general one, and affected by several other factors. In general, though, buyers who do not have a 20 percent down payment can expect to pay PMI, whether they're buying a home in Novato or elsewhere. If they plan for that that will be better prepared for the size of their mortgage payment. A mortgage payment that is otherwise manageable can put a home out of reach once PMI is added to it, if buyers are not prepared...

Moving-Up to a Luxury Home? Now's the Time!

Moving-Up to a Luxury Home? Now’s the Time! | MyKCM

If your house no longer fits your needs and you are planning on buying a luxury home, now is a great time to do so! We recently shared data from Trulia’s Market Mismatch Study which showed that in today’s premium home market, buyers are in control.

The inventory of homes for sale in the luxury market far exceeds those searching to purchase these properties in many areas of the country. This means that homes are often staying on the market longer which can eventually lead to a price change.

Those who have a starter or trade-up home to sell will find buyers competing, and often entering bidding wars, to be able to call your house their new home.

The sale of your starter or trade-up house will aid in coming up with a larger down payment for your new luxury home. Even a 5% down payment on a million-dollar home is $50,000.

But not all who are buying luxury properties have a home to sell first.

In a Washington Post article, Daryl Judy, an associate broker with Washington Fine Properties, gave...

How to Buy a Home: Steps to Succeed in the Home-Buying Process

Home Buying Explained for First Time BuyersWhen buying a home for the first time, it can seem overwhelming. Where should someone even start when making one of the most important decisions of their life? In truth, buying a home doesn’t have to be overwhelming. So to make the process more easily understandable, here are the steps it takes to purchase a home.

Set a Budget

No one wants to be in debt because they overestimated how much money they could afford to spend on a home. Creating a budget is an easy way for home buyers to stay on track when it comes time to start looking at homes for sale.

Save for a Down Payment

When purchasing a home, many mortgage lenders will require that the buyer have 20 percent of the home’s total cost up front in cash. However, it’s possible to pay with a down payment that is as low as 3 percent. Choosing to go with a low down payment can create difficulties for the buyer such as it being harder to find a mortgage or having to pay for private mortgage insurance (PMI). However, lower down payments are more accessible to a wider number of people, especially first time home buyers, so they shouldn’t be dismissed automatically.

Choose a Mortgage and Get Pre-Approved

There’s a large variety of different mortgages that home buyers...

Want to Use a 203k Loan? What You Need to Know

Buying a Fixer Upper With a 203k LoanA 203K loan is a viable option for a potential home buyer who has found the ideal home, but it needs some work completed before it can be lived in and enjoyed fully. This loan is guaranteed by the Federal Housing Administration (FHA) and funded only by lenders approved for the program. A 203k loan also involves special rules and stipulations that make it different than traditional loans.

Overview of a Standard 203k Loan

There are two types of 203k loans: standard and limited. The standard version is designed for renovations that are extensive such as structural repairs. In many cases, the homeowner is not able to live in the home during these repairs.

Because a standard 203k loan is designed for use with homes that need major repairs and/or renovations, there are no caps on the amount that can be borrowed for repairs. The homeowner is often not able to live in the home during this time so additional funds can be borrowed to pay for temporary housing.

Funding an addition, moving a load-bearing wall, structural repairs and repairs that require architectural drawings or a plan review are just a few instances in which a standard 203k loan can be beneficial for a homeowner planning renovations.

Limited 203k Loan Basics

Borrowers who need a loan primarily for cosmetic repairs can choose a limited 203k loan. There is a cap of $35,000 on the amount that can be borrowed for repairs using this...

No... You Do Not Need 20% Down to Buy NOW!

The Aspiring Home Buyers Profile from the National Association of Realtors (NAR) found that the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. The results of the survey show that non-homeowners cite the main reason for not currently owning a home, as not being able to afford one.

This brings us to two major misconceptions that we want to address today.

1. Down Payment

NAR’s survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 39% of non-homeowners say they believe they need more than 20% for a down payment on a home purchase. In actuality, there are many loans written with a down payment of 3% or less.

Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

2. FICO® Scores

An Ipson survey revealed that 62% of respondents believe they need excellent credit to buy a home, with 43% thinking a “good credit score” is over 780. In actuality,...

The Mortgage Process: What You Need to Know [INFOGRAPHIC]

The Mortgage Process: What You Need to Know [INFOGRAPHIC] | MyKCM

Some Highlights:

  • Many buyers are purchasing a home with a down payment as little as 3%.
  • You may already qualify for a loan, even if you don't have perfect credit.
  • Take advantage of the knowledge of your local professionals who are there to help you determine how much you can afford.

Contact the Marin Modern Team, your Marin County real estate connection, for assistance buying or selling a home in Marin County California.

...

6 Down Payment Options for Home Buyers

Different Down Payment Options For Home BuyersTraditionally, home buyers have been advised to save at least 20 percent for a home down payment. In a world where basic living expenses can make this type of savings seem insurmountable, there fortunately are options for buying a home with a low or zero down payment.

FHA (Federal Housing Administration)

For first-time home buyers, a loan from the FHA or Federal Housing Administration is ideal for anyone looking for low down payment options. FHA loans for a qualified first-time homebuyer means a low interest rate for the mortgage with a minimum down payment of 3.5 percent. The loan is issued from a bank or credit union and does require the home buyer to have private mortgage insurance.

VA (Department of Veterans Affairs)

For U.S. Veterans, the VA loan can be a good option when buying a home and it requires zero down payment. This type of loan help is available for qualified veterans as well as active-duty members of the various service branches including the National Guard and Reserves. Unlike the FHA loan, it doesn't require private mortgage insurance. However, there is a funding fee that may be as low as 1.25 percent. To date, the VA has guaranteed more than 22 million loans and refinancing options for veterans and active-duty service members in Marshall and other cities.

Navy Federal Credit Union

The Navy Federal Credit Union, another option for qualified...

More Than Half of All Buyers Are Surprised by Closing Costs

More Than Half of All Buyers Are Surprised by Closing Costs | MyKCM

According to a survey conducted by ClosingCorp, over half of all homebuyers are surprised by the closing costs required to obtain their mortgage.

After surveying 1,000 first-time and repeat homebuyers, the results revealed that 17% of homebuyers were surprised that closing costs were required at all, while another 35% were stunned by how much higher the fees were than expected.

“Homebuyers reported being most surprised by mortgage insurance, followed by bank fees and points, taxes, title insurance and appraisal fees.”

Bankrate.com gathered closing cost data from lenders in every state and Washington, D.C. in order to share the average costs in each state. The map below was created using the closing costs on a $200,000 mortgage with a 20% down payment.

More Than Half of All Buyers Are Surprised by Closing Costs | MyKCM

Keep in mind that if you...

USDA Loan Guide: What You Need to Know

Understanding USDA Home LoansEven if you're not a farmer, you may qualify for a zero down, low-interest mortgage loan that is 90 percent government guaranteed. It is just one of a broad range of programs that offer resources and assistance to rural communities and there are options for building new, buying existing properties or refinancing existing loans. Most of the USDA loan programs are designed to assist low to mid-income families in rural areas, but you meet some stringent guidelines prescribed by the Rural Housing Service of the U.S. Department of Agriculture.

What is a USDA Loan?

The Loan Program was initially designed to assist farmers and foster community development, and was administered by the Farmers Home Administration (FHA). Today, it is the keystone of a single-family loan program that helps hard-working Americans build or buy modest housing. The program limits income to no more than 115 percent of adjusted area medians.

The income limit can vary greatly from one part of the country to another. For instance, in some parts of California, the authorized income is more than $140,000. Some suburban areas, known as revitalization zones, have been temporarily approved under the program. One such zone is Half Moon Bay, located just south of San Francisco; the community is in an area known for its "urban farming" activity, although the big city is just miles away.

How Do They Work?

...

Home Sales Expected to Increase Nicely in 2018

Home Sales Expected to Increase Nicely in 2018 | MyKCM

Freddie Mac, Fannie Mae, and The Mortgage Bankers Association are all projecting that home sales will increase in 2018. Here is a chart showing what each entity is projecting in sales for the remainder of this year and the next.

Home Sales Expected to Increase Nicely in 2018 | MyKCM

As we can see, each entity is projecting sizable increases in home sales next year. If you have considered selling your house recently, now may be the time to put it on the market.

Contact the Marin Modern Team, your Marin County real estate connection, for assistance buying or selling a home in Marin County California.

...

Report: Homeownership Is a Precondition of the American Dream

Report: Homeownership Is a Precondition of the American Dream | MyKCM

Hearth just released their 2017 State of the American Dream report which showed that Americans still see homeownership as an integral piece of the American Dream. The report confirmed that “all generations–including millennials–agree homeownership is very important to achieving the American Dream.

Americans ranked “owning a home I love” higher than any other options (including “starting a family” and “finding a fulfilling career”) as an important part of the American Dream.

Despite some claims that homeownership’s importance to the American Dream is in decline, the report found that the dream of homeownership remains strong.

Of Americans who said they think achieving the American Dream is important, 70% think homeownership is important to the dream, and 41% think homeownership is very important to the dream.

What about Millennials?

Hearth addresses the desires of millennials by explaining:

“Contrary to popular opinion, millennials who want to achieve the American Dream are 5% more likely than Baby Boomers to think homeownership is important. And two-thirds of millennial renters view homeownership as important to the American Dream.

Although millennials are often portrayed as fickle and transient, they actually seek the stability of homeownership even more than their parents.”

Other Key Findings from the Report:

  • Homeowners...
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