Are You Making The Right Down Payment?

Okay, you’re getting ready to at check out some Hawaii Real Estate. You have a pretty good idea what price range you need to look in, but what about the down payment? What sort of down payment should you make? Should you use all of your hard earned savings to apply to a down payment on a home in Hawaii?

The most common down payment that we see in Hawaii is either 5% or 10% unless you are using your VA Loan Eligibility. Those percentages equate to a very large amount of money for Hawaii Real Estate because of the price of homes. The average price of Hawaii Real Estate is above $600,000 and condo prices above $300,000, the 5% or 10% down payment would be much larger than someone buying a home in the mainland.

For example, if you were looking to buy a $600,000 house with 5% down, which would be $30,000, the remaining $570,000 would be financed with a mortgage company. If you use your VA Loan eligibility, you will be able to finance 100% of the loan under most circumstances. The current maximum VA Home Loan amount in Hawaii is $625,500.

The more money you put down as a down payment on your conventional loan or your VA Loan will mean a smaller monthly mortgage payment. You may be able to finance 100% of your loan amount when purchasing Oahu Real Estate even if you use a conventional loan. If you can put more down, the better but only if you desire a lower mortgage payment. Not everyone is in the position to make a large down payment and that might make the monthly mortgage payment un-affordable. So rather than putting yourself in a tight financial situation each month, you might consider waiting another year to save a little more.

Remember, if your down payment is minimal, the choice of loan programs will be limited. In addition, if you are using a gift as your down payment, there are other limitations, and if you need the lender or seller to help cover some or all of the closing costs, there will be even further limitations. Finally, if you plan on using money from your 401-K or retirement plan, there will be different loan programs and rules.

In addition, be sure you account for all your expenses. Whether you buy new or used real estate in Kapolei, there will be expenses once you move in. For new homes, there are appliances, draperies, and for used homes, there are usually repairs. When deciding the amount to use toward a down payment, just keep in mind that you should have a little tucked away for those other expenses.

This may seem a little bit overwhelming for you but that is where we come in. Team Kucic, your Hawaii Military Relocation Experts, are here to look out for your real estate needs in Hawaii and set you up on a path to success. If you are considering a purchase of a home in Hawaii, contact us first for honest, expert advice.

For expert advice on downpayments and options for purchasing Hawaii real estate, Team Kucic services the following areas: Hawaii, Oahu, Honolulu, Mililani, Schofield Barracks, Ewa Beach, Kapolei, Ko’olina, Kailua, Kaneohe, Waialua, Aiea, Pearl City, Pearlridge, Pearl Harbor, Camp Smith, Marine Corps Base Kaneohe, Tripler Army Medical Center, Wheeler Army Airfield, Makakilo, Haleiwa, Mililani Mauka, Mililani Town, Waipahu, Royal Kunia, Waipio, Waianae, Nankuli, Lualualei, Makaha to name a few.