Look to Local Mortgage Lenders for Financing Expertise
Hawaii’s incomparable beauty, weather and lifestyle make it a highly desirable place to live. However, due to our limited space, the local housing market differs from the Mainland in many respects. And, when buying a property here, obtaining a mortgage can be a bit of a challenge due to Hawaii’s unique land laws.
Mortgage guidelines that are cookie-cutter for the Mainland do not always apply here. Consequently, it is important to find a lender with expertise in the local housing market. Buyers may have to deal with such issues as condos that are too small to be accepted for financing by Mainland lenders or properties with multiple residences on a single site.
To a local lender, these are issues we deal with often. To a Mainland lender, these are reasons to deny a loan.
As a Hawaii-based lender, Honolulu HomeLoans keeps a large database of condo information on file. Without this data, conventional lending becomes nearly impossible. Fannie Mae and Freddie Mac provide the mortgage markets with conventional lending, but they have guidelines that are designed for lending nationwide, and may not account for Hawaii’s distinct needs. This is where a local lender comes into play.
We supply information that enables buyers to purchase condos and properties that would otherwise be ineligible.
Additionally, exceptions are granted by Fannie Mae and Freddie Mac to local lenders such as Honolulu HomeLoans that can demonstrate the need for a local mortgage product and are trusted to provide quality lending solutions.
Even with the additional expertise of a local lender, a property could still fail to qualify for conventional lending. For these situations, a local lender uses a portfolio loan. Funds for portfolio loans come almost exclusively through investor relationships in the Islands. Not all lenders have access to portfolio lending and some lenders are the exclusive provider of a portfolio loan for a specific property or situation. At Honolulu HomeLoans, we have access to Fannie Mae, Freddie Mac, VA, USDA, portfolio loans and virtually every other available product in real estate lending.
So, what’s currently available to buyers? The years after the overboard lending of the early to mid-2000s made it a challenge to get a mortgage loan. However, those days are now behind the industry and there are many bright spots for borrowers.
If you have a good credit history and sufficient income, you can probably get a mortgage loan. Fannie Mae and Freddie Mac have even recently loosened their down payment requirements. With as little as 3 percent down, you can obtain a conventional loan. VA and USDA programs have no down payment requirement. Portfolio loans can allow for lending to foreign buyers, condotel (condo units in an operating hotel) buyers, new investors, vacant land, and construction projects.
A Jumbo Loan is another type of portfolio loan in which the loan amount exceeds $625,500. In the current market, Jumbo Loans actually have rates below that of conventional, conforming loans. An atypical situation, this is good news for buyers in Hawaii as home prices continue to climb.
When funds are available, there are several local programs to help buyers in Hawaii, especially first-time homebuyers. Most popular is the Mortgage Credit Certificate offered by the Hawaii Housing Finance & Development Corporation, which provides a tax credit to qualified borrowers based on the mortgage interest of a new loan to help offset the mortgage payment. (A list of approved lenders is available on the HHFDC site, www.dbedt.hawaii.gov/hhfdc. Funds are currently available.)
So, if you’re in the market for real estate in Hawaii, why not make the buying process as easy and convenient as possible by connecting with a local lending expert such as Honolulu HomeLoans. Please call (808) 681-7500 or visit our website, www.honhl.com, to schedule a no-obligation consultation. We are always available to walk you through the process.