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Home Equity Can Make Dreams Come Ture

homes0504_1For a long time, Bill Chang thought about exactly what renovations he would make to his Manoa home – someday. Architectural embellishments such as trellises, trimmings and corbels to enhance his home’s character, as well as a new front porch and entry stairs to enhance the curb appeal, all would definitely be on the list. Like most of us, Chang wasn’t sure he would ever have the opportunity to do all he envisioned. Nonetheless, he plunged in with gathering some estimates to spruce up the front entrance, including replacing the rain-deteriorated entry steps, some weathered siding, and correcting some site drainage problems.

“We had the funds allocated for what started out as some repair work,” says Chang. “Then the scope of the renovation started expanding, which, of course, increased the cost. As we got into the project, we found more repair issues, more maintenance items, things with our 28-year-old house that were not built or designed properly at the start.”

At one point, Chang met with his CPA and considered using some of his retirement funds as a source for additional money, but found the downside to tapping into his retirement was that he would have to pay taxes on that money.

“Instead, we were advised that using our home equity was really our best bet,” Chang recalls.

Chang went to three banks, comparing the best interest rates and best service. He found exactly what he was looking for when he sat down with Warren Dela Rosa at First Hawaiian Bank. Chang says the process was painless. In less than two weeks, he had the contingency funds needed for any construction cost overruns.

“Then, we just decided to just do this right and do what we’ve always wanted to do,” he adds. “These improvements have been a long time coming. Repairs aren’t going to be cheaper later, you know. So we included a new moss rock retaining wall to divert water from the house and create a larger, more useable backyard, and expanded the house with two new patios so we could enjoy our redesigned yard. FHB allowed us to afford and enjoy our newly renovated home.”

The Chang home will be completed in a couple of weeks. His advice to others is to find the best rates and the best service. “For me, I found both at First Hawaiian Bank.”

Of course, it is always good advice to use a reputable contractor and obtain all necessary building permits.

Skyrocketing college and private school tuition and expenses also rank among the top reasons why homeowners borrow on their home’s equity, along with debt consolidation and green remodeling projects.

“Your reason for borrowing will help you determine which product is right for you,” says Derek Wong, Vice President of Credit Products at First Hawaiian Bank. “If it is for a one-time purchase, like buying a car, and you don’t foresee needing to borrow in the near future, then an equity loan could be suitable. An equity line of credit is more versatile than a loan because you can access your line at any time, simply by writing a check.”

To find out what product is best for you, talk to a personal banker or mortgage loan officer at First Hawaiian Bank and come up with a plan to fund your dream. While it is comforting to have appreciation and equity in your home, you may be sitting on something that can help you meet major short- and long-term expenses. Remember, after all, that it’s your money. Tapping into it with an equity line of credit may help you achieve the secure financial future you are looking for.

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