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We Put You in a Perfect Place.

Are you thinking about financing your new home?

 

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…


“How much can I afford?”

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.


“Local” means they are better prepared to represent 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.


Get Pre-Qualified… or better yet, Pre-Approved.

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.


Know Your Home Finance Options

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.

Conventional Loans

  • Fixed Rate Mortgages are one of the most common types of loans and considered the simplest and safest form of mortgage. With a Fixed Rate Mortgage, you select the term – usually from 10 years to over 30 years – and pay a fixed monthly rate based upon the total amount, the term, and the interest rate.
  • Adjustable Rate Mortgages (ARMs) adjust with interest rates. When rates go down, they’re great, but if interest rates increase, your payment can go way up. ARMs typically offer lower initial monthly payments, but come with a significant amount of risk. Payments may still include taxes and insurance. Currently, interest rates are at their lowest level in decades; they are expected to rise over the next few years.
  • Hybrid Loans can combine features from both fixed and adjustable rate mortgage loans. For example, you might be able to fix the rate for a loan for a period of 5 years, then have it adjust to current interest rates.

Government Backed Loans

  • Federal Housing Administration (FHA) loans typically have lower down payment requirements and usually are easier to qualify for than conventional loans. The Federal Housing Administration (FHA) is part of the U.S. Dept. of Housing and Urban Development (HUD) and administers various mortgage loan programs.
  • VA loans are guaranteed by U.S. Dept. of Veterans Affairs and allow veterans and active military to get home loans with favorable terms, usually without a down payment. It is usually easier to qualify for a VA loan than a conventional loan. The U.S. Department of Veterans Affairs does not make loans, but guarantees loans made by lenders. The VA determines your eligibility and, if you are qualified, will issue a certificate of eligibility to be used when applying for a VA loan.
  • Rural Housing Service (RHS) Loan Programs are offered by the U.S. Dept. of Agriculture and can be used to purchase homes that are located in designated rural areas. This program can provide financing with minimal closing costs and no down-payment for those customers whose income falls within the income limits for the area in which they are buying.

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.

 

A Guide to Some Trusted, Local Lenders

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!

Lender Guide - 2016.pdf


** 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.

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  • Hilton Head Island, SC 29928

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