There’s something about crossing over the bridge onto an island. The sun’s a little brighter, the air smells fresher, and there is a smile on everyone’s face. So come on, be truthful. How many times have you dreamed of owning a beach home and experiencing the beach life? Most have! And why wouldn’t you? That’s why so many are intrigued by the popular HGTV shows like Beachfront Bargain Hunt. Wilmington area residents are blessed because we have some of the best NC beaches in Wrightsville Beach, Carolina Beach, and Kure Beach. Beach lovers come from all over the United States to vacation at our beaches and experience the white sand between the toes. So, let us show you our Cape Fear beaches plus how to buy your own piece of paradise with beach house jumbo loans and more.
Wrightsville Beach Jumbo Loans
Wrightsville Beach NC was honored by WRAL Out & About Voters’ Choice Awards as #1 Favorite NC Beach Destination. Plus it has been named one of the World’s 20 Best Surf Towns by National Geographic!
Wrightsville Beach is the more expensive beach option in New Hanover County, but it does offer so much. Located just across from the exclusive Landfall Community and Mayfaire Shopping Center, it is luxury beach living at its best. Although it is an expensive area, there is a reason for it. The beach house rentals market is thriving, the surfing is amazing, and the dining is out of this world!
Many consider an investment in the Wrightsville Beach market as a solid investment. Plus, you get to personally experience beach living at its best!
Wrightsville Beach Loan Options
A Wrightsville Beach jumbo loan is often needed to purchase a beach home because the prices are higher and buyers need more money than they can get with a conventional loan. Luckily there are great jumbo mortgage loans available for buying an oceanfront or interior beach home. Jumbo loans can get up into the millions, but are available. Shell Island Resort is a popular condo hotel destination for vacationers and investors love it too. Because it is considered a condotel, specialized condotel financing or cash are used to purchase these oceanfront units.
As with any loan type, jumbo lenders will finance a larger portion of the purchase price if it’s a primary residence. Typically expect to put down 20%, but 15 and possibly 10% are available. For a second home, the down payment is generally 20% or more. Finally, the down payment on an investment property jumbo loan is typically 35% of the home price. But keep in mind that the larger the loan size, the down payment percentage goes up as well.
Wrightsville Beach Military Veteran Buyers
Veterans, don’t forget VA jumbo loans to finance up to $1,000,000 on a primary residence at Wrightsville Beach! Veterans may use their entitlement for a potentially lower down payment compared to traditional jumbo loans. This is a unique, often forgotten option for Veterans, but yes VA loans can help buy into the Wrightsville Beach life!
Carolina Beach Jumbo Loans
Carolina Beach is one of the most affordable beaches around and there are a wide variety of home types. The Carolina Beach Boardwalk is a popular hangout because of the food, small beach town atmosphere and, often, live music. In Carolina Beach, the oceanfront and canal homes are very affordable compared to most beaches. This certainly helps with buying a beach home. The lower price point, but thriving beach house rentals market helps beach home owners cash flow the home better as well.
A popular home style unique to Carolina Beach are duplex condos or townhomes. Because of the zoning, many developers and property owners built an abundance of these 2 unit homes in the early 2000’s. They are unique because each has its own homeowner’s association or HOA. Keep in mind that it is important to use a local mortgage lender who understands these property types. Out-of-area mortgage companies just aren’t used to only 2-unit HOA’s.
Carolina Beach Loan Options
A Carolina Beach jumbo loan may be used to purchase a primary residence, second home, or even a rental property. Jumbo loans offer both fixed and adjustable interest rates. Actually, since Carolina Beach is so affordable, a conforming loan is often all that is needed. Conforming loans are loans less than $424,100. They are easier to qualify for and, typically, offer a little better interest rate.
But buying on the oceanfront or canal lots may require a larger jumbo mortgage loan. As with any loan type, jumbo lenders will finance a larger portion of the purchase price on a primary residence. Typically expect to put down 20%, but 15 and possibly 10% are available. A second home generally requires a 20% or more down payment. Finally, 35% down is usually needed for an investment property jumbo loan.
Military Veteran Buyers in Carolina Beach
Veterans, don’t forget VA jumbo loans to finance up to $1,000,000 on a primary residence at Carolina Beach! Veterans may use their entitlement for a potentially lower down payment compared to traditional jumbo loans. Because of the large military bases in NC, we have a large Veteran population at our local beaches.
Kure Beach Jumbo Loans
While driving around, you may ask Siri or Google for “beaches near me”. Then your smart phone says Kure Beach, pronounced “Cure EE”. Unless you are a local, you may not know Kure exists, but it does and it is a wonderful, quiet, small town beach like you went to as a kid. Kure Beach includes the oldest fishing pier on the east coast plus a popular tourist destination, the Fort Fisher Aquarium. Another charm of Kure Beach is there is relatively little commercial beach traffic. So just sand, sun, and you!
There are two ways to get to Kure Beach. The main way is driving through Carolina Beach, but another slower, scenic way is by the Fort Fisher Ferry which travels from Southport. Definitely a must do, at least once in your life! As far as the real estate market goes, there are mostly single family homes, but also condos and townhomes. If quiet beach life is your goal, Kure Beach should be considered.
Kure Beach Loan Options
Financing a home in quiet Kure Beach may include either a conventional or jumbo loan. Like Carolina Beach, prices are very affordable for beach homes. So, loans up to $424,100 would be a conventional loan which offers both fixed and adjustable interest rates. Surprisingly, much of Kure Beach is USDA eligible which means 100% financing for a primary residence! Additionally, Veterans choosing to live in Kure Beach could use a VA jumbo loan up to $1,000,000. VA jumbo loans are tough to beat!
But for non-veterans or those not buying a primary residence, oceanfront or canal lots may need a jumbo mortgage loan. As with any loan type, jumbo lenders will finance a larger portion of the purchase price on a primary residence. In Kure Beach, typically expect to put down 20%, but 15 and possibly 10% are available. A second home will generally require a 20% or more down payment. Finally, you’ll need at least 35% down for an investment property jumbo loan.
Jumbo Loan Down Payment Ideas
So, you know you want to own a beach home and you know what lenders will do. Then what are the ways to come up with the investment or down payment? Depending on each individual’s finances, there could be many and some you may not have thought of.
Liquid Assets for Down Payment
The most common and easiest down payment comes from checking or savings accounts. Many feel that funds in these accounts practically get a zero return on the money, so why not invest it in real estate. Plus this is an investment you can enjoy! I guess you could take your money out and roll around in it, but I think the ocean and sand are better! Other liquid assets include money market accounts or bonds.
Proceeds from Sale of Another Home
Selling another home that has equity is a great way to finance a beach home and meet the down payment requirement of jumbo loans. Keep in mind that most beach home sellers will not take a contingent offer though. So, your home will either need to be sold or be very confident that it will close prior to your purchase. Consult your tax advisor for potential capital gain or loss strategies when buying or selling homes.
Home Equity Line of Credit (HELOC)
Borrowing funds from another property such as a primary residence is a popular way to access down payment funds. Banks will lend from 80% to 100% of the home’s value minus the first mortgage balance. These lines of credit provide down payment funds at very reasonable rates. Additionally, they usually have affordable payments, but most are adjustable rates. Just make sure to factor the HELOC payment into your budget if using one for your down payment.
Beach Home Purchase Using a 1031 Exchange
If selling an investment property, consider a 1031 exchange to purchase your next investment property. A 1031 exchange is also called a “like kind exchange” as an investor is selling one investment and putting the proceeds back into another investment property.
The key advantage of using a 1031 exchange is it allows you to delay paying capital gain taxes on the sale of the first property, so you can invest all of the proceeds in the new property. Keep in mind, all of the funds must be reinvested; there are strict time limits on when the new property must be purchased; and there are rules about personal use of the property. Even with the restrictions, 1031 exchanges can be a great tool to help investors build wealth.
Choosing a Real Estate Agent to Buy a Beach Home
Do you think beach life is for you? Then, let’s talk before you call the listing agent! Remember, the listing company’s job is to get the best deal for the seller. Our job is to get the best deal for YOU. Plainly put, we represent ONLY you. Negotiations are always on your behalf alone, never for the seller. Neither our company, nor our agents, ever represents the seller side because we do not list homes. However, we can help you buy ANY home, including For Sale By Owners.
Our local agency is just down the road from Carolina and Kure Beach, and just across town from Wrightsville Beach. As local, exclusive buyers agents, we are consumer advocates for you. We believe BUYERS DESERVE BETTER! Watch our quick video below to see what we mean.
Author: Russell Smith
Branch Manager, Alcova Mortgage