How Much House Can You Afford?
Home prices in Marin are among the highest in the nation, and it's essential to determine how much you can afford before you start house hunting. Most of what you can afford depends on how much a lender will let you borrow. Fortunately, there are currently historic low interest rates and ground-breaking loan programs that make your affordability higher than ever. Once you have a general idea about the size of your down payment, your type of loan and its interest rate then you can quickly calculate how much house you can afford by using Yahoo's Mortgage Calculators.

Mortgage types
There are a variety of mortgages, so we have developed a quick overview for you of the most common types:

• Fixed rate mortgage - The interest rate and monthly payments
  remain the same over the entire term, which is traditionally 15 or
  30 years. A number of variations are available including short-term fixed rate mortgages, fixed rate loans with balloon payments at the end, and two-step mortgages with a lower rate for the first few years. The 30 year fixed mortgage is the most common loan program.
  
  
• Interest only mortgage - These mortgages allow interest only
  payments for the first 3, 5 or 7 years. The interest rate remains the
  same over a set period of time, and then the loan reverts to fully
  amortized over the remaining years. Interest only loans allow buyers to afford more by lowering the monthly payment. Although principle is not paid down, equity still accrues and cash flow is maximized. Interest only loans are very popular in Marin today.
  
  
• Adjustable rate mortgage (ARM) - The interest rates on these
  mortgages fluctuate according to interest rates in the economy.
  Initial interest rates are typically offered at a discounted interest rate, which are lower than they are for fixed rate mortgages. Over time, once initial discounts are filtered out, ARM rates fluctuate as general interest rates go up and down. Several types of ARMs are available.

Who Lends Mortgage Money?
Many entities including banks, credit unions, savings and loans, insurance companies and mortgage bankers furnish home loans. Most Marin homebuyers hire a mortgage broker to find the appropriate loan. A savvy loan broker can find you a competitively priced mortgage that meets your needs, and it's often easier and more effective than looking for the cheapest rates yourself.

The Importance of Having a Good Credit Score
When reviewing loan applications and making financing decisions, lenders check a homebuyer's credit report and score. Credit scores, commonly known as FICO scores, are based on your history of paying bills on time, the level of your outstanding debts, how long you've had credit, your credit limit, the number of credit cards and the types of credit you have. Credit scores range from 400 to 900, and you'll need a score of at least 620 to qualify for a standard loan. Because your credit history is so vital in getting a good rate, you should check your credit report before applying for a loan. If necessary, your loan broker can help you clean up your file. For more information on credit scores check out myFICO or the three credit bureaus Equifax, Experian and TransUnion.

Get Pre-Approved
Getting pre-approved for a home loan immediately enables you to start your house searching as a prepared buyer. So, do yourself a favor and start a relationship with a lender. Once a lender has evaluated your financial situation and credit report you will be able to decide on the loans available to you and become pre-approved. Your lender will then issue you a 'pre-approval letter' verifying that they will fund you the loan. Most sellers in Marin County require a pre-approval letter with your offer, so you'll need to get pre-approved in advance.

How to Find a Good Local Lender
When it comes down to financing, you need a savvy loan broker who is looking out for your best interest. It's not only the rate that counts; a good lender will analyze your personal financial situation and outline the best loan program for you. Our network of top Marin lenders is the very best in the county. Click here for a Top Marin Lender.