Marin County Real Estate Blog

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 –...

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...

Home Warranties and Why They Are Important

Sometimes overlooked, but nontheless important, item 7 D 10 of the CAR California Residential Purchase Agreement concerns home warranties and who will pay for them. A home warranty may cover many of the types of things that can go wrong shortly after the new owners take possession. And if it's not already in place at the time your furnace or dishwasher, or refrigerator breaks, or your roof starts to leak, its too late to purchase it to cover that occurrence!

I always make an effort to ensure my clients have a home warranty in place. Usually we write in the request for the seller to pay for the warranty. It's actually in the seller's interest to see that the buyer is protected because it protects the seller too.

I had clients a few years back who had the stove, washing machine, and refrigerator all quit during the first 3 months  they owned the home; the home warranty paid for them all! Another client had the furnace fail shortly after closing and it was replaced by the warranty company for just a small service charge. (After trying many home warranty companies over the years, I found a terrific one that actually holds up its end of the deal!)

Recently, one of my clients agreed to a rent-back for the sellers after the close of escrow, and during that time, the garage door opener failed. It was an old unit, and parts weren't available. Not only that, but the new unit required the replacement of the springs on the garage door, so it could have been quite expensive. Could have been. Except the home warranty company (the same one that bought the appliances for the client above) paid for everything. The total charge was just $75.00 for the service call, and the seller, who was in residence when the unit died, agreed to pay for that. No disputes, no arguments, no negotiations, no problem- everyone happy! Interestingly, that...

Home Owner Decisions: Hire A Professional or Renovate Yourself?

Should You Renovate Yourself or Hire a Contractor?Buying a home means investing in upkeep. Every so often we must tackle small and large repairs and updates to keep our investment in good shape. But should you try your hand at renovation, or should you pay the extra dough to get a professional to do it? This is one of the biggest home owner decisions you will make, and choosing wrong can have costly consequences. Consider these points when you are planning a home renovation for your Novato home.

What needs to be done?

Small updates like changing out faucets and installing ceiling fans are projects that don't take much time or skill. Installing kitchen cabinets, replacing a tub, or knocking down walls is far more complex. Home owners should consider the involvement of the renovation before diving into it themselves, or they could get in over their heads.

How handy are you?

Are you adept at using a hammer and drill, or do you not even know what those are? Renovating your home yourself requires at least a bit of carpentry talent. While almost anyone can paint, but biting off more than you are equipped to handle can result in the project getting ruined and looking wonky (think uneven tile) or spending even more money hiring professionals to fix the mistakes. Think about the project, how in-depth it is and whether or not you have experience on such a project before you decide on renovating...

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...

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...

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...

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....

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.

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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...