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Ruin the Home Buying Experience

This situation has crossed my desk more than once, and it seems to be happening more and more. Those interested in buying a home start house hunting before they get pre-approved for their financing. If you noticed, I did not include the term “pre-qualification”. To me, a pre-qualification means absolutely nothing. More on that distinction…

Buying a Property that needs Work

Sales of previously owned homes has slowed some, mostly due to a lack of inventory. In Hawaii, the bulk of sales are previously owned homes, as we don’t have large amounts of new development. After a long stretch of a seller’s market, a good portion of the inventory that’s available could be considered “not ideal”.…

The Sky is not Falling

Rate Trends

Since the beginning of the year, interest rates have risen about 0.500%. But if you look at where rates were exactly a year ago, they are only up 0.250%. For most people, the 30-Year Fixed rate is still below 4.500%. For many who are now just getting to that stage in their life where they…

Credit Scoring Models

What is a credit score, and how is your score calculated? There is so much misinformation and confusion, so let’s shine some light in the dark matter of credit scores. The first important step to understand is that the 3 big credit reporting agencies do exactly that. They report your credit payment history. Ever since…

Have an FHA Loan? Say Aloha!

With the rise in Hawaii’s home values, those with an FHA loan may now have the ability to refinance out of an FHA loan and lower their monthly payment. FHA loans allow those with little down, or insufficient income, or credit issues, or all three, to buy their slice of the American dream – owning…

Dump Your Home Equity Loan

The once cherished Home Equity Loan, referred to in the mortgage industry as a HELOC (Home Equity Line of Credit), suffered a major blow with passage of the tax reform act last month. For tax year 2018 and beyond, interest paid on these loans is no longer tax deductible. To make matters worse, virtually all…

Ethnicity and Race Questions on Mortgage Applications

Effective with applications taken after January 1st 2018, all lenders are now required to ask expanded questions on race and ethnicity. The reason for the change is to allow government monitoring of lenders to make sure they are serving all applicants fairly and evenly. If the data shows a greater percentage of denied applications for…

MCC is still Available

Various versions of the tax reform bill canceled a little known but useful program that helped many people qualify for a larger mortgage. The good news is that in the final version of the tax reform act The Mortgage Credit Certificate program was saved. The Mortgage Credit Certificate Program was authorized by Congress in the…

New Higher Loan Limits for 2018

This week, FHFA, the Federal Housing Finance Agency, the regulator for Fannie Mae and Freddie Mac, announced new conforming loan limits for 2018. This is great news for us in Hawaii. All lenders, regardless if a loan is going to Fannie or Freddie, use the Conforming Loan Limits set by the federal regulators to determine…

Using Rental Income to Qualify

Buying a home with extra bedrooms or an Ohana unit with plans on renting them out is a good way to have tenants help pay your mortgage. Or are you planning on buying a property to be used 100% as a rental? What about a vacation rental condo in one of the many resort areas…