Homeowners overcome obstacles with this ‘First Step’ program

firststepBy Lisa Scontras

Purchasing a first home can be an exciting and rewarding milestone in one’s life. A well-prepared buyer understands the terminology, financial options and complexities of the homebuying process, which can seem daunting without the right information.

At First Hawaiian Bank, first-time homebuyers can feel right at home with the First Step Home LoanSM — a program designed to help first-timers overcome some of the financial obstacles and achieve their dream of homeownership. Elina Grugier-Bell, Assistant Vice President and Manager of the Mortgage Banking Department at First Hawaiian Bank, points out the benefits of the First Step Home Loan:

LOW DOWN PAYMENT REQUIREMENT

“Traditionally, the minimum down payment for a mortgage is 20 percent of the purchase price,” says Grugier-Bell. “However, there are mortgage options available with less costs and lower down payment requirements, such as our First Step Home Loan. This program allows a much lower down payment as first-time homebuyers typically have less cash on hand for a traditional mortgage down payment.

“Parents and family members in Hawaii are often willing and able to help their children own a home,” she adds. “This product helps the borrower and their gifting family work together to accomplish the dream of home ownership. Paying a smaller portion of the typical down payment is much more achievable for first-timers.”

LOAN-TO-VALUE RATIO INCREASED

Most banks and lenders will only allow you to borrow up to 80 percent of the home’s value or purchase price.

A First Step Home Loan allows a higher loan-to-value ratio, meaning, for the same purchase price of a home, the bank will lend more than the standard 80 percent — lowering the down payment needed to buy the home.

WAIVER OF MORTGAGE INSURANCE

“Normally, mortgage insurance is required for loans with a loan-to-value greater than 80 percent,” says Grugier-Bell. “Depending on the mortgage financing program and institution, additional costs for mortgage insurance could be in the range of $297 to $600 per month on a loan amount of $625,500. By waiving the mortgage insurance requirement, the cost savings could be substantial.”

LOWER CLOSING COSTS

Another benefit of the First Step Home Loan program is a savings of up to $1,000 off closing costs. To qualify, the borrower must be an owner-occupant, and not have owned a home in the last three years.

Grugier-Bell says that helping first-timers overcome some of the financial obstacles makes the buying process much less stressful.

“Mortgage interest rates are competitive, and borrowers can opt for either fixed-rate or adjustable-rate mortgages,” she adds. “The maximum loan amount for this program is $625,500.”

How to get started? Talking to an expert is the first step toward owning your own home. A personal banker at First Hawaiian Bank will assess your financial situation and discuss the mortgage options that fit your needs. They will also be able to prequalify you so you can confidently shop for a home within your budget.

“Financial planning and understanding your mortgage options before shopping for a home is just smart,” says Grugier-Bell. “Knowing what you can afford is very important. It’s really important to sit down with a First Hawaiian Bank personal banker to make a financial plan and coordinate any gift funds before you start shopping.”

For more information about First Hawaiian Bank’s First Step Home Loan, and to get started with your plan to buy your first home, call 643-HOME (4663) or visit any First Hawaiian Bank branch to speak with a personal banker.

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