Home sales here in Hawaii have stabilized.In fact, in some cases, prices have gone down.
Still, the median cost of a home here is substantially higher than on the mainland.
Potential homebuyers may want to think about something called the "jumbo loan."
There are some lenders who are willing to offer something called the jumbo loan or jumbo mortgage.
"A jumbo mortgage loan is something that is not a conforming loan. A conforming loan is backed by Fannie Mae and Freddie Mac. It’s one of the best interest rates that you can receive. It’s backed by the federal government and depending on certain locations, there's certain loan limits,” said Gay McPhail of Central Pacific Bank.
Since there are limits on what the lender can provide, there are naturally limits on what the borrower must bring to the table.
"Okay, you usually have to put in at least a 20 to 25 percent down payment depending on the size of the loan amount, if it's a super-jumbo, you have to put in more. Also your debt to income ratio cannot exceed 45 percent,” she said.
What that means in essence is that your overall debt plus mortgage, divided into your gross income cannot exceed 45 percent. Any time your mortgage payment reaches half your gross income, lenders are going to raise their eyebrows. The fact is though, for financially successful and stable families here in Hawaii, the jumbo mortgage loan has a certain appeal.
"The other benefits are especially in Hawaii - our pricing is so expensive, our home pricing is so expensive - that it allows you to buy a more expensive home with lesser down payment. The down payment requirement - - a 20 percent on a million dollar purchase price is a very large amount,” she said.
Jumbo loan amounts vary. They are generally above $600,000 and the amount can depend on the island the zip code. They can also be used to re-finance. Talk to a financial consultant.
