Outer Banks, NC Home Buyers FAQ's
Answering Your Outer Banks, NC Home Buying Questions
Buying a Outer Banks, NC home is both thrilling and a bit unnerving, especially if you you are new to the area. Both experienced home buyers and first-time buyers alike will benefit from the frequently asked questions below. Before you begin your Outer Banks, NC home search, it is recommended that you prepare yourself for the journey by educating yourself. This will ensure you are a knowledgeable home buyer prepared to make a confident home buying decision.
Q - What is the first step I should take before I start my search for an Outer Banks lot or a home?
A - Before you begin your search, if you will be borrowing money, you should contact a lender to find out how much you will qualify to borrow. The interest rates will vary depending on the size of the loan, the size of the down payment, the type of loan; primary, second home or investment loan. An experience lender can hep you select the best type of loan for you needs. Contact me for a list of local lenders. Before you make an offer on a property, you should have a pre-qualification letter from a reputable lender, or if purchasing without a loan, you will need some kind of proof of funds.
Q - Will I need flood insurance?
A - The necessity for flood insurance is based on the flood zone that a property is located in. If the property is in an X flood zone, flood insurance would not be required by a lender. Other flood zones are AE, which is an area subject to inundation by the 1-percent-annual-chance flood event determined by detailed methods and VE, which is an area subject to inundation by the 1-percent-annual-chance flood event with additional hazards due to storm-induced velocity wave action. Ocean front homes typically fall into the VE category and these homes will have the highest premiums for flood insurance. A local insurance agent can give you an idea of the exact cost of flood insurance based on the location of the home, the elevation of the lowest finished loving space. If you would like to know the flood zone of a particular location click here for a link to the State of North Carolina website that will allow you to look up flood zones. There are some areas on The Outer Banks that are located in special hazard zones called COBRA zones. Flood insurance in these areas is not available through the National Flood Insurance Program (NFIP). Private flood insurance is substantially more expensive in these areas.
Q - What is a COBRA zone?
A - As defined by the Federal Emergency Management Agency(FEMA): "The Coastal Barrier Resources Act (COBRA) of 1982 and later amendments, removed the Federal government from financial involvement associated with building and development in undeveloped portions of designated coastal barriers (including the Great Lakes). These areas were mapped and designated as Coastal Barrier Resources System units or "otherwise" protected areas". They are commonly called COBRA zones, and in these areas, Federal money is not available for loans or Federal flood coverage. Property owners are allowed to develop their property as they desire (subject to building codes and laws) but they need to obtain “free market” loans, or loans that are not backed by the federal government and open market flood insurance is needed. There are some structures that were substantially improved before the initial COBRA designation, date of October 1, 1983 that are grandfathered and are eligible for federal assistance.
The four-wheel drive area of Corolla lies within a COBRA zone and there are a few areas outside of the four wheel drive area that also fall within the zone. Property values are typically lower than comparable properties outside of the COBRA zone, and it is important to take the added expense for flood insurance when doing an analysis of the properties value.
Q - I've never purchased a home before. Where should I begin?
A - Actually, you've already started the process. Fact-finding and reading articles is a great way to become a smart consumer. The highest priorities to focus on before you begin searching for specific areas, neighborhoods, or homes would be to:
- Familiarize yourself with your personal finances.
- Learn about the Outer Banks, NC real estate market.
- Carefully review your budget and begin to eliminate as much debt as possible.
- Have a down payment and earnest money ready when the time comes to act and make your offer.
- Speak with a lender to find out how much you can borrow and have them prepare a pre-qualification letter.
Your next step is to contact me. As your home buying specialist, I will protect your interest and manage the details of the real estate transaction on your behalf to your complete satisfaction. For more experienced buyers, a little brush up on the real estate process wouldn't be a bad idea. Of course, I will protect your interests and manage the details of your transaction every step of the way, as well.
Q - With all the bad news about mortgage products and home foreclosures, how do I avoid making a big mistake when deciding which type of loan to select?
A - I can recommend several trusted lending professionals or you can choose your own. Having confidence in your lender is important. Be sure you feel completely at ease with them. They should speak to you in easy to understand terms. Ask lots of questions and never sign any document until you know what you are signing and feel completely at ease signing it. More and more lending professionals are recommending fixed interest rate loans and interest rates are still very attractive. Of course, the type of loan best for you depends on several factors. Here are just a few:
- How much money do you have for a down payment?
- How long do you plan to own/ live in the home?
- What size of loan will you need?
- If purchasing an investment home, will you need to the rental income to qualify for the loan?
- Do you qualify for a FHA or VA loan?
There are many homes are on the market here in Outer Banks, NC, your choices are plentiful and the time is right for you to buy!
Let's Get Started!
Are you ready to schedule your home buying consultation? If so, contact me today and together we will review your needs and your budget to help you find the right Outer Banks, NC home for you!