Frank Howard Allen
511 Sir Francis Drake
Greenbrae, CA 94904

Information for Buyers

I Can Help You Find 
Your Dream Home!

I believe owning a home is one of life's most important goals. So I will do all I can to help you qualify for a mortgage, help you find your dream home, and lead you through the process of purchasing your first or next home with greater ease than you might expect.

You will find that there are a wide range of mortgages to suit nearly every budget, that there are many types of homes on the market that may fit your needs, and that the process of buying a home is actually easier than most people think.

Take some time to look through this information as it outlines the questions I will be asking you about your new home, what size mortgage you can qualify for, and the basic purchasing process. And, have fun! Buying a house doesn't have to be an  unpleasant experience; because the more informed and prepared you are, the easier the process becomes.

Here are the topics you will find more information on:

• Buyers Plan of Action: Let Me Tell You How I Work
• Why owning a home makes more sense than ever before.
• How much house can you afford?
• Figuring your monthly payments.
• Figuring your closing costs.
• Where do you want to live?
• What kind of house do you want to buy?
• The purchasing process

I may be reached by calling my office at (415) 925-3219 or by emailing me at Jessica@RealMarin.com  if you would like to discuss how I can help you find your perfect home!

Buyers Plan of Action: Let Me Tell You How I Work

1. You will meet with a lender if you haven't already. This appointment should be scheduled as soon as possible and you will need to provide
   employment, tax and bank account information. Allow about an hour to complete the loan application. If you do not have a specific lender in mind, I can recommend several. 
   
   
2. I will listen while you describe your new home. I will find out what is important to you. Do you prefer old homes or new ones? Do you enjoy yard work, or do you prefer  maintenance-free landscaping? How many beds and baths do you need? How big a lot are you looking for? These are just some of the questions I will be asking you.
   
   
3. I will search for homes that best fit the description you give me. I'll start with a computer search of available properties and will narrow the list down with your specific requirements. I will then preview these homes to ensure that they are a match for you.
   
   
4.  After your lender gives preliminary approval to your loan and we know the price range you can comfortably look at; we will find a time that is convenient for you to look at the properties that I feel best fit your requirements. The first tour is usually a fact-finding trip to confirm that I have heard what you said and to see if there is anything you want to add or subtract to your list of wants and needs in a home.
   
   
5. When we write your purchase offer, bring your check book. Typically, when you make an offer to purchase a home, you include a deposit with the offer, usually from $500 to $5,000 depending on the purchase price and terms in the offer. This check will be held uncashed until your offer is accepted by the seller, then  deposited into the escrow account.
   
   
6. I will present the offer to the seller and/or their agent. We will receive an acceptance, rejection or a counter offer. Negotiating an acceptance of the purchase agreement and opening an escrow will take from 1-5 days.
   
   
7. Once the offer is accepted, I will open escrow. During the escrow period, there will be times where there is much to do, and times where it seems as though nothing is happening. This is normal. Escrow periods are usually 20-45 days from acceptance to closing. The final loan approval process, which takes 3 to 4 weeks from application, will also be completed during this period.
   
   
8. During escrow, you will have inspections and receive disclosures to learn all you can about the property. This is the discovery period. Usually, you have 7 - 15 days after acceptance to complete any requested inspections. If possible, you should attend these inspections. During the first days of escrow, you will also be provided with disclosures about the property. It is during this period that any remaining questions about the property and it's condition should be answered. 
   
   
9. During the last week of escrow, the pace will pick up and several things will happen. Your loan will be approved; the lender will send documents to the escrow officer; you will be notified about how much money you will need to cover the rest of the down payment and closing costs; you will sign loan and escrow documents and deliver the final monies to the escrow officer.  The escrow officer will send the signed documents back to the lender; the lender will review them one last time then fund the loan. Usually one day after the loan funds, the transfer of title will be recorded and now, finally, you will have purchased your new home!

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Why owning a home makes more sense than ever before.

If you have been thinking about buying a house, or condominium, now is a good time to make your move. Housing values are moderating and mortgage rates are great, which is good news for prospective home buyers.

Owning a home is smart for a number of other reasons, too:

• You can build equity in a home, often for about the same monthly payment you may be spending on rent.
• You won't be subject to rent increases or other unexpected changes in rules and leases.
• If you improve your home, or propery values go up, your investment appreciates - and you could make money on your home when you sell it.
• You will enjoy some tax benefits: the interest on your loan is deductible on your federal tax return, and your property taxes are usually tax deductible.
• New home financing programs: some requiring very small down payments or flexible interest rates, make this a good time to get a mortgage.

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How much house can you afford?

Once you have decided that owning a home is right for you, how do you know how much house you can afford?

Begin by looking at your personal financial situation. This will involve taking an inventory of what you own, determining its value, and subtracting what you owe. When you have completed this exercise, you will know how much money you have available to make a down payment and cover the administrative costs on a mortgage and how much will be left to provide some spending money for additional fix-up, furnishing, or decorating expenses.

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Figuring your monthly payments.

A down payment is just part of the cost of purchasing a home. The real test comes in knowing what size monthly mortgage payment will fit your budget.

Fortunately, there are two standard formulas to determine how much home-buyers can comfortably afford to spend each month on a home-loan payment: one based on income; the other based on debt. 

To calculate an affordable payment using the income formula:

Simply add your monthly income before taxes with all other interest you may earn each month on savings or investments. Then, multiply the total by 28% (.28). The resulting figure represents the maximum amount you should plan to spend on your monthly mortgage payment - including principle, interest, taxes, and insurance.

$___________ x .28 = $______________

To calculate an affordable payment using the debt formula:

Take your before-tax monthly income and multiply it by 36% (.36). Then, add up all your other monthly payments (auto loan, credit card, student loan, etc.). Subtract this total from the figure you arrived at using the .36 multiplier. The resulting number represents a maximum monthly payment for mortgage and all other bills allowed by most lenders.

$___________ x .36 = $_______________

Of course, other circumstances enter into the picture too, and can influence your "lendability." 

Now that you know how much you can pay per month, how much "loan" does this buy? 

To figure the amount of loan you can borrow, use the following table and formula. Monthly payment necessary to amortize a 30-year loan: 

To figure your monthly payment, take your loan amount and divide by 1000. Take that figure and multiply it by the factor under the amount of interest you will be paying. 

For example, to figure the monthly payment for a $400,000 loan at 7% interest: $400,000 / 1000 = 400 400 * 6.65 = $2660 monthly payment of principle and interest, not including taxes or insurance.

If you have questions about your credit, financial history, or income-to-debt ratio and would like to know more about their impact on your borrowing status, give me a call as I have several mortgage brokers and lenders I can refer you to. In the meantime, use these formulas to help determine a mortgage payment that is in line with your monthly budget.

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Figuring your closing costs.

Now that you know how much mortgage a month you can afford, let's take a look at how much you can put down for the purchase of your new home.

It is customary for buyers to put 20% down on the purchase of their home. However, since most first time buyers don't readily have access to that amount of cash, they wrongly believe they can't purchase a new home. In recent years a number of ways have been created for buyers to purchase their first home.

A mortgage broker or lender can explain these ideas more fully but some examples are:

Cash gifts from relatives
15% down, an 80% first loan and a 5% credit line
10% down, an 80% first loan and a 10% second loan
 5% down, an 80% first loan and a 15% second loan

So, don't get discouraged because you don't have 20% of the home price right now! There are numerous alternatives to this standard down payment, and you would be surprised how quick relatives will help family members who are first time buyers.  And sometimes sellers will finance a second loan to help out a buyer.

Along with your down payment, you will need an additional amount of cash to close escrow (finalize the sale) on your new home. This additional amount is approximately 3% of the sale price of the home. This additional cash requirement is for inspections, loan fees, title insurance, taxes, homeowners insurance, etc.

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Where do you want to live?

Before you begin to house-hunt, spend some time getting to know the communities in Marin; their neighborhoods, schools and amenities. Ask about housing costs. Watch the real estate ads. Talk to neighbors and friends.

Think about what is important to you. Should you live near a park, playground, or school? How do you feel about driving far to go to work? Do you want the convenience of having grocery stores and other shops nearby? Are you a city kind of person, a suburbanite or a rural type.

The answers to these and other questions will help me filter through the homes on the market, preview the ones that sound like they fit, and in a short time be able to show you the house and neighborhood you are looking for.

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What kind of house do you want to buy?

There are many questions that need to be answered before a real search for your dream home can begin. I will ask you all types of questions about the type of home you are looking for. Do you want a fixer or something you can move into immediately? What type of architecture appeals to you? Are  views are necessary for you? Is privacy important? Do you have a particular school district you require or is the commute more important?

When I have listened to you and have a good idea of your "perfect" house I will preview those homes that meet your criteria and set up showings with you to see the ones that match your needs.

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The purchasing process!

As stated in the Buyers Plan of Action, when we have found your new home, I will guide you through the purchase agreement, additional forms and paperwork. I will present your offer to the seller and help you negotiate any counter offers that may result. When your offer is accepted, I will assist you through escrow and hand you the keys to your new home!

I will be there with you every step of the way explaining the process, terms and definitions, what is required and what is optional (but probably a good idea)!

When escrow closes and you have the keys to your new home, I don't stop there. I will keep your file open for the length of time you own that house. If any questions or problems arise with your new home, I am available to you and will assist you with anything you might need. If I am not able to assist you I will help you find someone who can.

In summary, these are the steps to owning your new home:

1. Figure out how much you can afford and how much you want to spend.
2. Decide where you want to live and what type of house you want.
3. Make an offer, enter escrow, close escrow and receive your new keys.

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It is just that easy if you have an agent that is committed to you and your dreams. I am the agent that will deliver for you!

  I have recently moved back to my home town of Albany, OR and am now selling real estate in Linn County Oregon and selling homes in Benton County Oregon.  If you know anyone looking for a realtor in Linn or Benton County  please have them get in touch with me at (541) 924-1644 x236.