If you are, we recommend that your speak to a trusted, local lender. There are many reasons why you should partner up with a trusted, local lender from the beginning…
Lenders can help answer one of the most important questions people ask when buying a new house: “How much can I afford?” Knowing how much you are able to spend on a new home will help guide you in your property search. Getting in touch with a lender at the beginning of the home buying process can also help boost your purchasing power with creative financing options that work best for you.
If you are shopping for a mortgage or exploring your home financing options, we suggest you speak to a local lender. Even if you have a long-standing relationship with a lender in another city or state, it is important to choose a lender who is familiar with purchasing property in a resort community like Hilton Head Island and Bluffton. Choosing a local lender who is familiar with the Lowcountry market’s property values, homeowners associations, and other factors can help you avoid unforeseen problems that can affect the loan approval and closing process.
Pre-qualification Letter: Get an idea for how much you might be able to borrow by getting pre-qualified for a loan. This is not an actual loan application, as the lender performs the pre-qualification based on your estimates of income, assets, and liabilities. None of the information is verified and the loan amount is not guaranteed – it’s simply an estimate of how much you might be qualified to borrow. Getting a pre-qualification letter from a lender usually takes very little time and is a great way to get the home buying process started. You can even pre-qualify for a mortgage online in just a few minutes, and shop lenders before you decide on a home financing plan. A pre-qualification letter simply states you are likely to be approved for a mortgage, and can help you determine your price range when searching for a new home.
Pre-Approval Letter: Getting pre-approved means the Lender has collected all of your financial data such as pay stubs, w-2’s, tax returns, bank statements, etc. and pulling a credit report. Once the loan has been processed, the loan is then submitted to an underwriter who issues an actual loan approval/commitment letter. The pre-approval letter states the amount for which you are approved for and how long the approval is good through. A pre-approval from a lender carries more weight than a pre-qualification letter. Getting pre-approved is necessary if you are serious about purchasing a home. Sellers pay attention to serious buyers who present a pre-approval letter, and are often more willing to negotiate on price. If you present a pre-approval letter, you will be better-equipped to compete with cash buyers and multiple offers.
When purchasing property in Hilton Head Island, Bluffton, and surrounding areas, it is important to know the different types of loans and financing options that are available to you. Speak to a local lender to find out what kind of mortgage might be best for you.
Government Backed Loans
Conforming and Non-conforming Loans
Conforming Loans conform to requirements set forth by Fannie Mae or Freddie Mac, the Government-sponsored enterprises (GSE). These entities provide funding for loans that meet loan limits which are determined my by the property location. Conforming loans require a minimum down payment of 3-5% or more. Non-conforming loans (“jumbo loans”), are portfolio loans held by certain Lenders for loan amounts that exceed Conforming loan limits. Non-conforming loans can carry higher interest rates, but this varies from Lender to Lender since the loans are held in a given banks’ portfolio.
There are so many things that can affect the home buying process. One of the most important things you can do is to choose the right local lender if you intend to secure a mortgage. We have had both good and bad experiences in working with lenders and have found that experience is the best way to choose. For additional local lenders, visit www.hhireb.com/local-lenders.
Below are the names of some great lenders based on our clients’ experiences.
Feel free to reach out to any of these lenders. Or if you prefer, we would be happy to introduce you to one of them, personally. They will answer all your questions about qualifying for a loan, current interest rates, down payments and special programs – and will do so without any cost or obligation!
** Please note that we offer this information and list of outside vendors as a matter of convenience. The list is based on the positive experiences as described by our past clients. Hilton Head Island Real Estate Brokers, Inc. neither endorses or recommends any specific vendor. A link to additional vendors is provided so you can find most available vendors in the area.