You are about to buy your dream home in Hawaii. You’ve spent numerous hours browsing the web, comparing and contrasting homes with your real estate agent, and now, it’s time. All of the excitement is building as you wait to hear back from your agent on if the offer you made was accepted. You get the call…and the home is yours! Your agent later explains to you that the sellers were choosing between yourself and one other offer, and because you were Pre-Approved, they went with you!
Homes go quickly in Hawaii; make sure you’re well prepared for your best chance at success
1. Pinpoint Your Buying Power
While there are many reasons to get Pre-Approved before you start shopping for a home, the most important and practical reason is that you will get an accurate idea of how much home you can afford. This will allow you to narrow your search to the homes that actually fit your budget. The home search process can feel overwhelming, don’t waste your time and energy looking at homes that don’t fit your budget.
2. Put Together a Game Plan
One common thing we hear from potential borrowers is, “I think I need to work on my credit first.” If you are not sure if you can qualify for a loan, that is even more reason to start your home buying journey by speaking with a knowledgeable local mortgage professional. Even if you don’t qualify for a loan right now, by talking with a mortgage professional you can at the very least find out where you stand and what hurdles you may need to clear before buying a home.
Another comment we hear is, “I’m not going to be ready to buy for another year or two, so I don’t need to talk to a lender yet.” The Pre-Approval process is free and doesn’t take much time to complete. Even if you are not ready to buy now, it is still a great idea to get Pre-Approved or at least Pre-Qualified just to make sure that you will be ready when the time comes. In some cases we will be able to identify potential red flags or “hurdles” that need to be cleared prior to buying a home, and that extra time will allow you to put together a solid game plan.
3. Strengthen Your Offer
In a “Seller’s Market” it is very common for a seller to receive several similar offers from seemingly qualified buyers. In cases like this, the seller and their Realtor have to try and decide which offer they should accept.
One of the main factors in their decision making process is the “strength” of the buyer. When comparing offers on a home, the Realtor will consider a buyer with a Pre-Approval letter much “stronger” (less risky) than a buyer who just provides a Pre-Qualification letter with their offer.
Because the Pre-Approved buyer has provided documentation to verify accuracy of the information provided in their loan application, the lender is able to run their loan application through an automated underwriting system. This extra step allows the lender to confidently state the “buying power” of the borrower.
In the Hawaii real estate community, Realtors are aware of the difference between a Pre-Qualification and a Pre-Approval, and it could mean the difference between getting an accepted offer on your dream home and getting passed by for another buyer.
Why Use a Local Lender?
Hawaii has some very unique challenges when it comes to lending and properties, including:
- lava zones
- leasehold properties
- condominium property regimes (CPR)
- water catchment systems
- agriculture zoned properties
There are several other reasons why using a local lender is beneficial:
1. Each island has its share of quirks when it comes to getting a loan approved. Properties with unpermitted additions are commonplace, which can derail a loan at the last minute. An experienced local lender will be aware of potential red flags and know how to address these issues. Most importantly, they know which lender will work specifically for your property because of their experience working with homes in Hawaii.
2. Furthermore, we have a unique closing process in Hawaii that takes longer than most. A local lender will help you plan accordingly, so that you can be assured that you will close on time.
3. Lastly, the majority of Hawaii’s Realtors prefer working with a buyer that chooses a local lender.
If you would like to know more about getting Pre-Approved for a Hawaii home loan, or about Hawaii real estate opportunities, please contact us.