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faviconJudy Reynolds is a mortgage consultant with more than 20 years experience assisting buyers with financing their Outer Banks vacation homes. Her office is in Southern Shores
Judy Reynolds
Judy Reynolds Home Mortgage Consultant NMLSR ID# 68180
How is getting a mortgage for an Oceanfront Home different from financing any other house purchase?

The main reason an oceanfront home is different is due to the Jumbo loan amount.   Loan amounts above $417,000 are considered Jumbo and have slightly different guidelines for loan approval.

What is the one thing about the financing that most surprises buyers looking for a mortgage?

The documentation requirements are by far the biggest surprise.   You just need to go into the process knowing that you are going to have to provide every detail of your financial life.   We work hard to ensure there are no surprises throughout the entire process.

If I want to purchase this jointly with a business partner or relative how does the mortgage process work with two buyer entities?

We would need the same documentation from all buyers and would weigh equally the credit, income, assets and liabilities of all.

I am considering owning this home in the name of an LLC or Trust. Does this affect the financing of the purchase?

There is no problem to title the property either in an LLC or a revocable trust.   Each have slightly different documentation requirements that you should discuss with your lender at your first meeting to ensure a timely closing.

Most vacation homes include all the furnishings as a part of the sale. How is this handled in the mortgage?

If the items are left for the convenience of the seller as is normal and customary for the area this will have no effect on financing.

I have a personal banker at my bank at home that handles all my bank needs. Would this individual be involved in this transaction?

Your banker can help us to compile much of the financial documentation that is required for the transaction.   He/she will understand exactly what we need and can be very helpful in compiling a complete package for your lender.

I’ve heard that the documentation requirements to get a loan are burdensome. What kind of application paperwork is needed?

Yes, the loan process is very thorough, recent financial reform legislation has made it a legal requirement for each lender to fully document every loan request.   Be prepared to provide documentation of your complete financial picture and provide to your lender the exact documentation that is requested in a timely manner to ensure a smooth process.

Why would a buyer choose to get local financing on the OBX rather than use a hometown bank?

Your local lenders understand the nuances of the very unique Outer Banks real estate market.   We are much more familiar with the insurance guidelines as well as with the elements of the typical vacation home sales contract.

Is the potential rental income counted in qualifying for a mortgage?

As a general rule you would need to qualify without the use of the subject property rental income.   There are certain situations, requiring a much larger down payment of 40%, where we can use rental income.

How much of a Down Payment is usually required for financing an OF?

As a general rule these loans require 25% down.   However there are some instances where we can make it work with 20% on an exception basis.

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