Hawaii Military Life: Understanding VA Loan Monthly Housing Costs

Buying a home in Hawaii is a dream for many people all over the world. Having the privilege of being able to use a military service earned VA loan for that purchase is just a little bit sweeter. Understanding the structure of how your monthly payment over the course of a home purchase can certainly be a little hazy for first time home buyers. The following monthly payment breakdown will help to illustrate the typical components of a VA loan and generic 30-year mortgage here in Hawaii.

4 Mortgage (Home Loan) Components

*All paid together as one payment per month*

Principle

The amount of money a borrow (buyer) has to pay back to the lender (bank).

Interest

The amount of money a lender charges a borrower to loan out the money for the home purchase.

Property Taxes 

Taxes assessed by the County of Honolulu used to fund public services. Calculated on a per year basis. Automatically collected by your lender and withheld in an escrow account to be paid bi-annually.

Homeowners Insurance

This type of insurance protects the home and its contents from fire, theft, and other disasters like hurricanes or floods, depending on policy and area purchased. Condos often have slightly different “HO6” policy that covers the interior of the owned property while part of the Association fee covers the exterior building.

Monthly Association & Maintenance Fees

If buying a condominium “condo” unit or single-family house within a Planned Urban Development (PUD), there are one or possibly two extra monthly fees in addition to the mortgage owed. These two fees are the association and maintenance fee; each holds different purposes in paying for the continued organizational operation and physical upkeep of the association. Over time these expenses will increase as they typically follow inflation. It’s not uncommon and quite normal to see small fee increases of 2-3% every few years.

Association Fee

This amount of money covers the re-occurring expense for the operation of the governing owner elected board members and association management company. The association management company is the commercial entity hired by the association to assist with managing the community in a professional and organized manner.

Maintenance Fee

This amount of money covers the re-occurring expense for the current and future physical upkeep of the community improvements like landscaping, building and structural repairs, roads, sidewalks, etc.

Example monthly cost on a common $620,000 single-family home located in an association on Oahu, Hawaii…VA loan/No down payment at 3% interest rate. 

• $2,614 Principle & Interest
• $173 Property Taxes
• $150 Homeowners Insurance
• $480 Association & Maintenance fees
• Total $3,417/month

The Bottom Line

A VA loan is a valuable tool enabling veterans the easier opportunity at Hawaii homeownership. Understanding the individual components of a monthly mortgage and association payment will help shed light on the sometimes obscure process for better decision making when you’re ready to buy your Hawaii home!

Have a Home Buying or VA Loan Question?

Don’t hesitate to reach out to me or Hawaii VA Loans Officer, Brad Vilgos, for expert Hawaii home buying and VA lending guidance!