Tips From Your Local Lender

Seaside Seven Team member Ann Baker was lucky enough to sit down with a local lender, Katie Sheats, from Direct Mortgage Loans. Katie has been in the mortgage business for over 36 years! If anyone knows this industry in-and-out, its Katie. These women went over a few tips to help navigate the confusing world of financing- especially in this CRAZY market!

The initial step before purchasing a home is getting pre-approved… or is it pre-qualified? Knowing the difference can be confusing. Luckily Katie provided clarification. When you prequalify for a loan, you are obtaining approval based on the ballpark estimate of what you tell the lender. Your credit is most likely not ran and the lender will give you a range for the loan you likely will qualify for. For a pre-approval, on the other hand, credit will be ran, income and assets will be verified. This is going to be the official approval. Getting pre-approved gives a buyer a leg up in today’s competitive, fast paced real estate market.

Ann followed up with a great question: “About how long is it taking to process loans right now?” Katie answered with explaining that 45 days is ideal, but 30 is possible with proper documentation and pre-approval. *Another pro for getting pre-approved!*

Katie goes into the differences between qualifying for an investment property vs. a second home. With a second home, you are allowed to rent out the property, however you must use it for at least 14 days out of the year. With that being said, rental income from a second home cannot be used to qualify for a loan. An investment property, on the other hand, rental income may be used to qualify. These loans typically require a higher down payment and have a higher interest rate.

A common concern Realtors have these days are whether or not a property will appraise. If property appraises for less than the sale price, the lender lends on the appraised value, or the sale price- depending on which is less.

Finding the right lender for your needs is a considerable decision. Katie Sheats is knowledgable and dedicated to getting her clients the best loan. “That’s my job, to answer questions, making sure that in your buying process you know exactly what’s going to happen, you are comfortable and you are prepared for one of the largest financial purchases you are going to make.”

Follow the link below to watch the full video of Katie and Ann!

Still have more questions? Email [email protected] or reach out to Katie Sheats directly [email protected]