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5 Mortgages for Buying Ocean Pines, MD Real Estate You Should Know!

Michael Nolen of Coldwell Banker Realty
by Michael Nolen of Coldwell Banker Realty on November 2, 2016 at 12:47 PM

Did you know it’s simple to find out if you qualify? Put your assumptions aside and call a local mortgage lender. It may be more affordable to buy Ocean Pines, MD real estate than you think!

In this article, I share some basic details about five different mortgage loans that could help you buy a home in the Ocean Pines, MD area.

Ocean Pines, MD Real Estate


Getting Started with Your Ocean Pines, MD Homes for Sale Search!

To get started, you should consider contacting an Ocean Pines, MD real estate agent. Real estate agents are coordinators in the home buying process – and they're not just there to open doors!

In fact, real estate agents can help you:

  • Understand the home buying process
  • Give tips for preparing and getting started
  • Explain potential options for buying
  • Guide you to additional resources, like a mortgage company


Contacting a Mortgage Company in Ocean Pines, MD

It’s important to know that you’ll need to contact a licensed mortgage company to learn all the qualifications and program details. The information in this article is a starting point for researching your financing options.

When you call a mortgage company, they take some basic information, order a credit report in minutes, and help you understand your financing options. Many loan officers are happy to spend time with you and explain your options, even if you don't have a good FICO credit score. They're happy to share their knowledge about loan programs and help you understand your options now or help you prepare for the future.

For example, Samuel Kotzur with First Home Mortgage in Ocean City, MD helped me understand some of the basics about the mortgage programs I've written about in this article. So, thank you Sam for the knowledge and time you've spent.


Here are five mortgage programs that could help you buy Ocean Pines real estate.

Second Homes and Investment Properties

Many consider buying a home in Ocean Pines because they want to be close to the beaches in Ocean City, MD. There are single family homes, townhomes, condos, and lots of amenities. There's even a 55+ Active Adult community, The Parke at Ocean Pines.

#1 Conventional Financing

Conventional loans are more common if you're buying a second home or investment property in this coastal real estate market. Conventional financing may be a little harder for a first time home buyer. It may require a down payment of 10% to 20% of the purchase price. If you're getting a loan with less than 20% down (or a loan to value greater than 80%) you may have mortgage insurance in addition to your principle and interest payment.

For example, if you buy a home for $125,000 with a conventional loan, you may need a down payment of $12,500 (10% of the purchase price) to $25,000 (20% of the purchase price)


Buying a Home You’ll Occupy as a Primary Residence

Ocean Pines is home to over 15,000 full time residents. There may be a few loan programs that can help you buy a home that you'll occupy with great financing incentives.

Helpful Tip: In case you didn't know, a primary residence is a home where you primarily live.


#2 USDA Loan Program

USDA loans are available through the Untied States Department of Agriculture in select rural markets. Many Ocean Pines homes for sale may meet USDA eligibility for a loan. They can offer buyers 100% financing. This means you may not need a down payment to buy a home.

There’s an upfront USDA mortgage insurance premium due at settlement, which is a percentage of the total loan amount. You'll also have a monthly mortgage insurance premium since you're financing with a loan to value greater than 80% of the purchase price.


#3 FHA Loan Program

FHA mortgages are insured by the Federal Housing Administration. Depending on your qualifications, FHA requires a down payment of 3.5% of the purchase price, in addition to closing costs.

For example, if you buy a home for $125,000 in the pines, you may need a down payment of $4,375 (3.5% of the purchase price).

There’s an upfront FHA mortgage insurance premium just like USDA loans, which is due at settlement. USDA loans and FHA loans upfront mortgage insurance premium are different, so you'll want to contact a mortgage company to learn what the upfront costs will be to make sure you know how much home you can afford.


#4 FHA 203K Loan Program

FHA 203k loans may be a great option for buying a home that may need some work. For example, foreclosures in Ocean Pines may need some work in order to get approved for an FHA mortgage.

Since FHA has specific requirements for the inspection of the home to get the loan, you could get additional money to fix up the property. You may even be able to get some extra money for improvements like a new kitchen, flooring, etc. The repairs will need to be approved by HUD.

You’ll still may need a 3.5% down payment. Your down payment will not be based on the purchase price like a traditional FHA loan, but the price plus the total renovation cost estimates and is due at settlement. You may be able to finance as much as 110% of the after improvement home value.

For example, if you buy a home in Ocean Pines for $125,000 and the estimates for repair costs from a HUD approved contractor is $20,000, your down payment may be $5,075 (or 3.5% of the purchase price + repair costs).


#5 VA Loans

The Department of Veteran Affairs guarantees VA loans. If you’re eligible for a VA loan (which means you’re a veteran), you could get a loan without a down payment and your closing costs may be lower compared to other mortgage programs.

What you need to know?

Remember, you'll need to contact a mortgage company to learn all of your options and real estate agents can be a helpful resource for understanding the process and additional options. You should research mortgage companies and make an informed personal decisions for who you hire. 

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Michael Nolen of Coldwell Banker Realty
Michael brings a diverse background of mortgage, loan servicing and housing experience. Michael offers his clients a variety of helpful resources, guides and services that helps make buying and selling coastal real estate in the Ocean City, Ocean Pines, and Coastal Delaware markets. Michael has over 11 years industry experience and invests and manages vacation rental properties in the Ocean City, MD area through Nolen Invest and Nolen Vacation Rentals.
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