Getting a loan today usually requires a little more time and effort but that is no different than anywhere else in the country. If you have refinanced or purchased property elsewhere over the last few years then you are familiar with this process. However, there are a few unique aspects of getting a loan on OBX property. Using a local lender can save you time and effort.
Outer Banks lenders are familiar with issues like flood zones and vacation rental property. Just about the entire Outer Banks is in some type of flood zone. When some out of town lenders discover the property you are considering is in a flood zone they make a decision not to lend without fully understanding the minimal risk and/or ways to insure against the risk. Also, some times an out of town lender will also treat a vacation rental home as investment property. Loans for investment property (like a year round rental home or an apartment building), typically have higher interest rates. Local lenders realize that the vacation rental homeowner has control over the property and therefore is eligible for the more favorable second home loan programs. Using a local lender can help you avoid these and other pitfalls lenders unfamiliar with this area fall into.
Here is a mortgage calculator on-line to help you determine monthly payments but that is really just part of the financing story. Local lenders also will also be able to ball-park taxes and insurance. These expenses are almost always included in today’s mortgage payments. Lenders from out of the area will not be familiar with these costs here. Taxes here are typically lower than most metropolitan areas but insurance is a little more expensive. Being able to ball park these expenses will help you make a much better buying decision down the road. Lastly, they can provide you with a pre-qualification or pre-approval letter. Having a letter from a local lender gives you more credibility with a seller and their listing agent than a letter from an out of town lender.
The lending process on the Outer Banks is unique compared to most areas. Using a local lender will likely save you time and effort and possibly some money.