First Time Hawaii Home Buyers – What is Fiscal Health?

The good news is that banks are lending to first-time home buyers (FTHB). Hawaii lenders offer many financial products to help the FTHB with programs or products like Hula Mae, Mortgage Credit Certificates, USDA, and VA. You will need to begin by checking your fiscal health, and talking to a lender to get pre-qualified and begin the loan-approval process to purchase real estate.   

Many of our local banks are giving exceptional interest rates and terms. Some programs offer exceptional products for conventional fixed rates, conventional adjustable rates, and non-conforming or portfolio loans. 

Interest rates are near zero and the Feds announced last week they will continue to keep interest rates low for the next two years. There is a lot one can read into their announcement, but I am not a financial adviser or a lender, and do not want to speculate on what the Fed is going to do—I’ll leave it up to others.

With the low interest rates and significantly lower home prices, this is a great time buy. I encourage you to take that first step, talk with a lender, and get on track. Bank of Hawaii and Guild Mortgage are two local companies that have FTHB programs.

What a difference an interest rate can make:

4.00% 5.00% 6.00%
4.133% APR 5.141 APR 6.150% APR
Interest Rate 1 Point Higher 2 Points Higher
Home Price*
$200,000 $763.86 $858.92 $959.28
$400,000 $1,527.73 $1,717.83 $1,918.56
$600,000 $2,291.59 $2,576.74 $2,877.84

*Monthly principle and interest payment (with 20% down)

The payments reflected in the above chart are principle and interest payments only. They are based on a 30-year amortization and 20% down payment. Mortgage insurance, insurance, and taxes are not included. Check with your lender for more information.

Credit Worthiness

Take responsibility for your fiscal health. Check you FICO score, if you do not know what your FICO score is, you will need to do that now. To check your FICO score now, click here. If you have discrepancies with the report, you have the right to dispute the error and bring up your score. The higher the score, the lower your rate will be.    

Next, you will need to figure out your debt-to-income ratio and what you truly can afford. Talk to a lender at a savings and loan, credit union, commercial, or mortgage bank and get pre-qualified. They will help you understand your credit worthiness and the products you may qualify for. 

Rural Housing (USDA)

Rural Housing is a government sponsored program that allows for true 100% financing in designated rural areas. The United States Department of Agriculture (USDA) government sponsored loan, which only lends in a rural area, is very popular in rural areas, making this a perfect product for buyers who are looking at upcountry Maui.


  • No down payment required
  • No mortgage insurance requirements
  • The property must be located in a designated rural area
  • Income restrictions apply
  • No reserve requirements
  • Seller contributions allowed

VA Financing and the VA Programs

The VA is a government sponsored program that allows U.S. Veterans the ability to finance up to 100% of the purchase price on a new home. If you are a Veteran, this is an exceptional opportunity the government provides to those who have served our country.


  • No down payment required
  • No reserve requirements
  • Seller contributions allowed
  • Borrower must be Active Military or a Veteran
  • Cash out available to 90% LTV

The bad news could be if you do not take advantage of this market time today. 

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October 7, 2011

Karen-thanks for that!


October 7, 2011

Karen-thanks for that!

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