Nathan Colmer | The Van Dyk Group
C: 609.290.4293 | O: 609.492.1511
Information about LBI NJ real estate mortgages, financing on Long Beach Island and the LBI NJ real estate market. There are many loan products available to help buy a home on Long Beach Island New Jersey including construction loans and loans for storm damaged homes.
There are many types of mortgages and financing options available on Long Beach Island and it is important to understand the differences between them so as to not overpay in the LBI real estate market. There are loans available for second homes, investment properties, vacant land, storm damaged homes and construction projects as well as duplexes and small condominiums in the LBI real estate market. Please remember that I am a real estate agent and as such cannot give specific mortgage advice. The information I have provided is intended as a general overview of the options available to most consumers. It is best to contact a lender for specific terms and qualification information. I have provided the names and phone numbers of some of the lenders I commonly work with.
Debra Botulinski (908) 400-8040
Advisor's Mortgage Group
Len Herbert (732) 684-5771
Fulton Bank (Construction Loans)
Ilene Jacobs 732-610-0260
Most buyers with a mortgage on Long Beach Island will seek a second home mortgage for their purchase. This type of loan shares many similarities with a primary home mortgage however in most cases the down payment will be a minimum of 20%. The generally lower interest rates, favorable terms and down payment requirement make this type of loan very popular.
If the property is going to be used as an investment, meaning a substantial block of weeks will be rented out for income, than most likely an investment loan will be required. The terms and interest rates will vary depending on the lender and the current market but typically an investment loan will carry a slightly higher interest rate and the interest will not be tax deductible. Investment loans do have an added benefit of allowing for a 1031 tax deferred exchange.
Construction loans are the most common form of financing for new construction in the LBI real estate market. These loans are similar to the home style loans in that the bank will lend money based on the estimated costs of construction and then disperse the money in draws as the project progresses. Construction loans are commonly used with lot loans in the LBI real estate market.
With some homes having been damaged by Hurricane Sandy and being sold for land value. Luckily there are "lot loans" available that are used strictly for the purchase of vacant land in the LBI NJ real estate market. The key word here is "vacant" so there can be no building existing, damaged or undamaged, on the property.
After Hurricane Sandy, many homes in the LBI real estate market were being sold "As Is" with no repair being done on the house. Since a bank loans money on the house rather than the land, these storm damaged homes in the LBI real estate market do not qualify for traditional financing. Therefore, special loan products are required. The most popular of these is a Home-style Loan. These products are a hybrid of a conventional loan and a construction loan in that most will package the purchase price of the damaged house with the estimated cost of construction and loan 75% of this amount. Money is dispersed in draws as construction proceeds and when finished, the loan reverts to a conventional loan with no additional closing required. As is the case with all mortgages, terms and rates will vary depending on the mortgage company and the product.
There are some unconventional loan products available for houses that do not fit the traditional requirements of conventional financing. Most common are duplexes and small condominiums. Duplexes are, in most cases, automatically considered investment properties so they will carry a higher down payment and may carry a higher interest rate. Small condos (under 600 sq. feet usually) do not fit the guidelines of Fannie May and therefore require creative financing.
Buying a home in the LBI real estate market is an exciting experience and can act as an excellent investment opportunity. Since the impact of Hurricane Sandy the end of October 2012, both the number of homes sold in the average sales price been on the rise. For many, the improvement in the real estate market on Long Beach Island has prompted action and increase the desire to own a home at the beach. For those looking to buy a home on Long Beach Island, it is important to understand LBI real estate second home loans and how they may differ from a primary mortgage...Continue Reading
While there are some excellent opportunities to purchase a home in the LBI real estate market, it is important to make sure you can comfortably afford the home purchase. Depending on the intended use of the home, there are some creative solutions to buying a home in the LBI real estate market and alternative financing strategies on Long Beach Island. Some of these can result in an easier process and a more affordable carrying costs for your second home or investment property...Continue Reading
Hurricane Sandy made landfall on Long Beach Island at the end of October 2012 and caused major damage to the area. Luckily, thanks to flood insurance payments, fundraising, community efforts and hard work, the LBI area has made a major recovery and is looking better than ever! There are still some storm damaged homes for sale on Long Beach Island and these properties offer both a unique opportunity and a unique challenge. The major difficulty in purchasing storm damaged homes on Long Beach Island has to do with financing as these properties will not qualify for a traditional loan. Therefore, special loans are required and one of the best is the Home Style Renovation Loans in the LBI NJ Real Estate Market...Continue Reading
Understanding Construction Loans and the LBI NJ Real Estate Market on Long Beach Island The LBI Real Estate Market The real estate market on Long Beach Island consists of many different styles of homes in a wide variety of price ranges and locations. Unlike many other real estate market, Long Beach Island sees a great … Continue reading →
Understanding Cash Real Estate Transactions in the Long Beach Island NJ Real Estate Market The LBI Real Estate Market on Long Beach Island NJ The LBI real estate market on Long Beach Island NJ comprises the sale and rental of single family homes, condominiums, duplexes, commercial real estate, vacant land and homes damaged by Hurricane …Continue reading →
Understanding How National Events May Impact Interest Rates and The LBI Real Estate Market Interest Rates on Long Beach Island NJ The LBI real estate market, like all real estate markets, is influenced by interest rates. Generally speaking, the higher the interest rates climb, the “less” house buyers can afford. At present, interest rates have … Continue reading →
Higher Interest Rates and New Lending Options in the LBI NJ Real Estate Market Long Beach Island NJ Real Estate The LBI real estate market has, even in the wake of Hurricane Sandy, remained an area of intense activity with buyers and sellers both being very active. One key contributing factor to this activity level … Continue reading →