The Blog ofHome Sweet Marin

Dealing with Financing

Homes in Marin County are not cheap. But if you get your financing in order before your start your home search, you will know what you can afford and you will be in a better position to get the home you want in this competitive market.

Get pre-approved. By getting pre-approved as a buyer, you can save yourself the grief of looking at houses you can’t afford. You can also put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head. Talk to me if you need recommendations for lenders. Local lenders have a better understanding of the Marin market and agents may feel more comfortable accepting an offer from a mortgage broker or lender they know.

Choose your mortgage carefully. Used to be the emphasis when it came to mortgages was on paying them off as soon as possible. Today, the debt the average person will accumulate due to credit cards, student loans, etc. means it’s better to opt for the 30-year mortgage instead of the 15-year. This way, you have a lower monthly payment, with the option of paying an additional principal when money is good. Additionally, when picking a mortgage, you usually have the option of paying additional points (a portion of the interest that you pay at closing) in exchange for a lower interest rate. If you plan to stay in the house for a long time—and given the current real estate market, you should—taking the points will save you money.

Do your homework before bidding. Before you make an offer on a home, we can do some research on the sales trends of similar homes in the neighborhood. Consider especially sales of similar homes in the last three months, as that is the time period lenders use in looking at values.