Mortgage question (real estate, leasing, condos)

[Sweetbeet]

Aloha all!

I remember reading somewhere (not here) that the cutoff point for a "jumbo" mortgage is higher in Hawaii than in most other states (due to the high typical house cost). Does anyone know at what amount a mortgage is deemed "jumbo" in Hawaii? Also, what are rates running for a $500-575K mortgage in Hawaii right now (with a > 20% down payment and stellar credit)? I'm thinking they will probably go down some more after the Fed drops rates at the end of the month...

[TimtheGuy]

50% higher than the rest of the country ($625k)

rates should be in the mid 5's or lower for you.

[Sweetbeet]

Thanks - are you saying that $625K is the threshold in Hawaii?

[cynmkolohe]

Here is a sample from a recent rate sheet from a lender, dated 1/17/08:

Jumbo (Greater than $625,500): 6.125%, 1.875 points, 30-year fixed
Conventional (Owner-Occupied or 2nd home): 5.25%, 1.75 points, 30-year fixed
Conventional (Non-owner occupied, 75% LTV): 5.5%, 1.75 points, 30-year fixed

Please note all rates and points are subject to change without notice. It is a good idea to establish a working relationship with a lender who has a local office and is experienced with Hawaii real estate in order to avoid possible delays during the escrow/underwriting process.

[Sweetbeet]

Thanks. We have contact with someone on Kauai, but I was just looking for general information. I sometimes want to avoid the delays inherent in contacting my sister, waiting for her to contact the "mortgage lady" and get back to me. With the time zone shift, it's often easier to get general info by looking online or asking here.

Your answer (and its reference to "owner-occupied") prompts another question: if three people buy a property jointly, and one occupies it - with the others having partial ownership as "investors", but living in another state - is the property still considered "owner-occupied"?

[cynmkolohe]

No worries, the above is just a general recommendation for any reader...there are so many instances of cases where buyers have insisted on working with a mainland lender or an internet-based lender only to face delays with underwriters who have to do first-time research into Hawaii's unique circumstances (Special Management Areas, tsunami zones, flood zones, lava zones, single wall-construction, what is a lanai?...etc, etc...). Many nationally known lenders have offices here and loan officers who have relationships with underwriters--it just simplifies the process for the buyer if they are working with someone "on the ground".

I think the distinction in your scenario would be whether or not you are using the property for rental income.

[joe aloha]

Have a question , what does the term fee simple mean? Looking at properties and could possibly get job offer within the next few months.

[HankDfrmSD]

Originally Posted by joe aloha

Have a question , what does the term fee simple mean? Looking at properties and could possibly get job offer within the next few months.

Read this thread:

tenancy--what you should know when purchasing property

Here's the specific post:

I think the number one thing to understand is the Hawaii lease hold scheme, whereby you own the building, but only lease the land! Now there's a dumb only-in-Hawaii-idea. Be very certain that you are buying the land fee simple (weasel talk for actually owning the land, not leasing it). Same w/ condos, which technically are not attached to the land. They are fee simple or lease hold. You could end up paying a lot of money for a property, only to see it snached away from you years in the future. Do not blindly believe what a realtor tells you. Educate yourself on property laws before even looking at a place. W/ the internet, you can be in possession of what used to be inside information within the reality companies, who are out to sell you a home and put their kids through school, not give you what you are looking for. It is definitely buyer beware in this game, and the more you know the better.

[StillHope]

Originally Posted by joe aloha

Have a question , what does the term fee simple mean? Looking at properties and could possibly get job offer within the next few months.

"Fee simple" means you own the land and the house/condo on that land."Leasehold"-you don't own the land your house is standing on and fill be forced to pay as much as the land owner can get away with or sell the house.

[cynmkolohe]

If you are focusing on the Big Island, it is rare to see properties are leasehold anymore. It is out there, esp if you are looking at condos around the Bayfront or in Kona, but most of what you would see in a single family home search will be fee simple properties.

It's easy to see on any MLS listing sheet. FS=fee simple. LH=leasehold.

As a Realtor, I certainly try to do my best to educate my clients when they begin a property search. I regularly work with buyers who are searching in Hawaii for the first time. The clients I appreciate most are those who want to take the time to have an in-depth conversation about Hawaii real estate. But you would be surprised how often someone wants to fly in for a day or two, see 10-15 properties and then leave thinking they have a good understanding of what it means to live in Hawaii. The Realtor-Client relationship is definitely a two-way street. Anything you want to know about, I will do my best to tell you...and if you give me a chance, I'll tell you more than you probably want to know!