CONNECTING THE WORD

HAWAII INTERNATIONAL REAL ESTATE, LLC

Phone: (808) 778-3716 • Fax: (808) 859-5414 • E-mail: Info@HawaiiRealEstatePortal.com • 1888 Kalakaua Avenue, C 312, Honolulu, HI 96815

This Web page provides information for First-Time Buyers. Welcome!

First-time buying a house it is a complicated process which requires a lot of efforts and attention from the first-time buyer. For many first-time buyers, buying a house seems to be an enormous maze, since there are so many factors--emotional, financial and legal - involved. With lower home prices, low mortgage interest rates, tax credits and big discounts on short-sale and foreclosures, buyers have plenty of incentives to get into the   real estate market in Hawaii. Although it is easy to get caught up in the gloomy national housing trends, first-time home buyers in Hawaii should be paying more attention to what is going on in the local market where they are considering purchasing property. After all, home prices in Hawaii are  almost stable that is different from the rest of the country. This Web site will help first-time home buyer navigate via real estate market in Oahu. and here you can find information about first-time home buying, first-time home financing and settlement process. If you have any questions, please contact me. Mahalo!

 
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Home Sales Slip, But First-Time  Buyers Rise
First-Time Home Buyers Trends

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Existing-home sales eased in March but first-time buyers are responding to low mortgage interest rates and tax credits, according to the NATIONAL ASSOCIATION OF REALTORS®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 3 percent to a seasonally adjusted annual rate of 4.57 million units in March from a downwardly revised level of 4.71 million in February, and were 7.1 percent lower than the 4.92 million-unit pace in March 2008.

Lawrence Yun, NAR chief economist, said the market appears to be stabilizing with modest monthly ups and downs, and that first-time buyers are driving the market. “The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey,” he said. “Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans.”

Although prices rose from February to March, the national median existing-home price for all housing types was $175,200, down 12.4 percent from March 2008. The price increase from February to March was 4.2 percent, which is much higher than the typical 1.8 percent seasonal increase between those two months. Distressed properties, which accounted for just over half of all transactions in March, typically are selling for 20 percent less than traditional homes.

First-time home buyers are much more flexible in entering the market because they aren’t concerned about selling an existing home. Given low home prices, plentiful supply and affordable interest rates, it’s been an optimal time for entry-level buyers with a long-term view.

Considering the temporary first-time buyer tax credit and improvements to the FHA loan program, we expect stronger entry-level activity as the flow of credit improves – that, in turn, should free more existing owners to make a trade in 2009.

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According to NAR Study  conducted between July 2007-June 2008 :

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  • The median age of first-time buyers went down a year to 30 over 12 months.
  • The median first-time buyer income was $60,600.
  • First-time buyers stated they plan to stay in the home for 10 years, up from seven years in 2007.
  • The median down payment by first-time buyers was 4%, up from 2% in 2007.
  • Zero down purchases fell from 45% in 2007 to 34% in the current survey.
  • First-time buyers that made a down payment, 69% used savings, 26% received a gift (usually from parents), 7% received a loan from a relative or friend, and 16% tapped into a 401(k) fund, stocks or bonds.
  • First-time buyers chose a fixed-rate mortgage 92% of the time.

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Where do I get information on home market statistics and trends? Honolulu Board of Realtors® updates this data monthly. Contact me NOW and request the current status of the local housing market.

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An NAR practitioner survey in March showed first-time buyers accounted for 53 percent of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available. “Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” Yun said. “By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.”

NAR President Charles McMillan said first-time buyers are crucial at this stage of a housing recovery. “The housing market always heals from the bottom up, and with large numbers of first-time buyers entering the market it will become a little easier for sellers to trade up or down, according to their needs,” he said.

“Although homeownership builds wealth over the long term, buyers need to evaluate their options. In this market, buyers and sellers who use a REALTOR® to represent them are making a smart move,” McMillan said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 5.00 percent in March from 5.13 percent in February; the rate was 5.97 percent in March 2008; data collection began in 1971.

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New $8,000 Tax Credit for Home Buyers

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Attention potential home buyers! Take advantage of an $8,000 tax credit toward the purchase of a principal residence for first-time buyers on or after January 1, 2009 and before December 1, 2009. And to make the deal even better, the credit does not require repayment. It's all part of the American Recovery and Reinvestment Act.

Learn about the new 2009 tax credit and legislation

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First-Time Buyer Tax Credit: 6 Things to Know

by Luke Mullins

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While the proposed $15,000 home-buyer tax credit died in negotiations between the House and the Senate, the $787 billion stimulus bill that President Barack Obama signed into law Tuesday includes a similar--albeit smaller--measure designed to help revive the real estate market. Here are six things you need to know about the freshly-enacted $8,000 first-time home buyer tax credit.

1. Eight grand, new buyers: The tax credit included in the economic stimulus legislation is much narrower than the $15,000 proposal. This credit is equivalent to 10 percent of the purchase price of the home--although it's capped at $8,000--and applies only to first-time home buyers and principal residences. But unlike an earlier $7,500 home buyer tax credit, this one does not have to be repaid.

2. First time buyers defined: For the purpose of this legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before buying a house. (The date of purchase is considered the day that the title is transferred.) That means if you've owned a vacation home--but not a principal residence--within the past three years, you would still qualify for the credit.

3. 2009 buyers only: Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit. Anyone who bought a home last year won't be able to take advantage of it.

4. Income limits: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that's $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.

5. Refundable: Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't have much tax liability.

6. Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.)
US Department of Agriculture Program

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The USDA Program helps first-time home buyers and former homeowners buy houses with a USDA Guaranteed home loan.  This loan currently offers loans with the following criteria:

  • 102% Financing which means NO MONEY DOWN

  • Closing costs can be included in the loan in some cases

  • All credit types are welcome to apply

  • One of the only no money down options still available.

  • Loan can be used as a construction loan, purchase loan, or a refinance loan when the current loan is also a USDA loan

  • Applicants for loans may have an income of up to 115% of the median income for the area.  Area income limits in Hawaii  for this program are here.

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First-Time Military Buyers

Top VA Loans Benefits

100% Financing

$625,500 Loan Amount

No Mortgage Insurance

Reduced Closing Cost

Easy to Be  Qualified

Low Cost Refinance

620 or Higher FICO Score

VA Jumbo Loan < $1 ML

No Prepayment Penalty

VA Loan Amount

For Single-Family Home, $0 Down, Maximum Up to:

Hawaii - $625,500

Honolulu - $783,750

Kalawao - $656,250

How First Time Home Buyer Loans Work

Kauai - $775,000

Advantages and Disadvantages of First Time Home Buyer Loans (by Justin Pritchard)

Maui - $681,250

First-time home buyer loans allow buyers to get into a house more easily. However, just because you’re a first time home buyer doesn’t mean you should use a first time home buyer loan. These programs have restrictions and strings attached. While they are a perfect fit for some, first-time home buyer loans are the wrong choice for others.

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AmeriDream®, Inc. Program

Grants For First Time Home Buyers

What is a First Time Home Buyer Loan?

AmeriDream®, Inc. is a non-profit organization dedicated to helping people find affordable housing. Part of the AmeriDream mission is to help low and moderate income families buy homes by offering down payment assistance. Buyers who are qualified for an FHA loan but don't have the money for down payment and/or closing costs are eligible to apply for AmeriDream down payment assistance:

  • A down payment gift of up to 10% (typically 3%-6%) of the purchase price.

  • A true gift-the down payment assistance is not repaid by the home buyer
  • Home buyer must have an approved FHA home loan or pre-approved FHA loan.

A person’s first home purchase is a big deal. It takes time, energy, and money. To help with the money hurdle, some people use first time home buyer loans. These programs vary depending on where they’re offered, but the general idea is this: first-time home buyer loans give financial assistance to qualified borrowers. They may do this in the following ways:

Note that first-time home buyer loans available to you might offer any or none of the benefits listed above. You should research first-time home buyer loans available in your area. A good place to start is the HUD Web site on home buying programs.

Before you begin looking for a grant, it is important that you have secured a lender. It also helps if you have an idea what kind of home you can afford. Contact me today and request my lender's partner information!

What Types Of Down Payment Assistance Programs Are Available?

Down payment assistance programs come in a variety of ways. To be sure, each one is designed to help homebuyers who need help with their down payment, but otherwise qualify for a mortgage.

Who Gets First Time Home Buyer Loans?

As you might imagine, individuals who have never owned a home are good candidates. In addition, some programs offer first time home buyer loans to people who have not found a home within the last three years. Again, check to see what’s available to you.

You may have to meet certain income restrictions to qualify for a subsidized first-time home buyer loan. In general, these programs try to limit benefits to people with low and moderate income levels. If you earn too much, you won’t qualify for the program.

To participate in the AmeriDream down payment assistance program, buyers should:

  • Get pre-approved for an FHA mortgage and start looking for a home.

  • Make an offer on the home you want to buy and get a ratified contract.

  • Your loan officer applies for the AmeriDream down payment assistance program on your behalf.

  • You will receive a "Notice of Gift Approval" from AmeriDream.

  • Close the deal on your new home.                                Read more

Confirm with your lender if this program is still available

Down Payment Assistance Grants

Grants are essentially a sum of money given to someone for the purposes of fulfilling on a particular goal or mission. Similarly, down payment grants are given to home buyers, most often first time home buyers, to help the home buyer with the expenses of buying a home.

Typically, grant money does have some strings attached. Some grants do not require the money to be paid back if you own the home for at least 5 years (some are 9 years). These grants are know as forgivable grants. Other first-time buyer grants do not require payments or pay back until the home is sold.

First Time Home Buyer Loan Restrictions

Most programs put a dollar limit on the property you’re buying. You probably can’t use a first-time home buyer loan to buy the more expensive properties in your area. Instead, you’ll be limited to properties on the lower end of the spectrum. Again, the idea is to benefit people who have the most need.

You also have to live in the home as your primary residence. If you're going to rent the place out, don’t use the first-time home buyer loan. Finally, the home you buy most likely has to meet some physical requirements. It must be in good condition and free from any safety hazards (such as lead-based paint, for example).

First Time Home Buyer Loan Pitfalls

For some first-time home buyers, these programs are perfect. They open the door to home ownership where a family would not have been able to buy a home. Communities also benefit from first-time home buyer loans – homeowners take care of their property, get involved, and contribute to the economy. Nevertheless, first-time home buyer loans can be the wrong choice in some cases.

With a subsidized firs-time home buyer loan, you face some challenges:

  • Lower value home may not be the home you want
  • You might lose some of the benefits of the program if you sell your home too soon
  • You may have to pay recapture tax for some of the benefits you received
  • You may be limited to a short list of loan types (only 30 year fixed rate mortgages for example)
  • You may have to share increased home values with the program

    • Given these restrictions, you may do best to avoid subsidized first-time home buyer loans. Patrick Schwerdtfeger, a California mortgage broker, notes that you’ll probably come out ahead using a plain-vanilla mortgage if you’ve got decent credit (Mr. Schwerdtfeger also does the Beyond the Rate podcast – required listening for first time home buyers). With a FICO credit score above 720, you probably won’t see an advantage with the subsidized first-time home buyer loan. Once you get below 680, the subsidized program will start to look better. These days, you can get traditional mortgages with very little down.

    The best thing to do is to explore all your options. Take a look at what your traditional mortgage lender is offering, and compare it to the subsidized first-time home buyer loans. Once you see how the numbers compare, consider the cost of flexibility.

    Another popular financial programs are: Hula Mae created by the Hawaii State Legislature in 1979 for families of low and moderate income, Native Hawaiian Housing Loan Guarantee and Single-Family Housing Guaranteed Loan for low and moderate income families, among others.

    How Do I Get Down Payment Assistance?

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    You get down payment assistance by applying for it through your local mortgage company, nonprofit housing agency, or through your bank. To get this money, you will have to be able to be qualified for the first mortgage, or primary mortgage, on your home.                     Full Article

    Down Payment Assistance Programs

    Below are down payment assistance programs that may be used to buy a home in Hawaii.

    Nehemiah - down payment assistance program for buying a home with no money down.

    HART - down payment assistance program allows you to buy a home with no money down.

    Neighborhood gold - this is another down payment assistance program that allows you to buy a home with no money down.

    Evgeny V. Dafner, Ph.D.

    Principal Broker

    First-Time Home Buyer! Pay Attention Finding Real Estate Agent On-Line

    Please be mindful when you use the Internet to select the Real Estate Agent  on-line who will find a dream home for you in the future. Most of Web sites which you will find at the top pages of search engines are supported by agents whose role in the real estate is just the Web site marketing and leads generation. They make money only on selling these leads to another agents receiving back a referral fee. This fee is negotiable between agents and they may vary between 25 to 50%.

     

    The Professional Real Estate Agents dedicate all his time and effort to make YOU happy satisfying YOUR real estate needs. The brokerage fee is a major source of income for Professional Real Estate Agents. They spend time and invest money in education to improve knowledge to provide YOU with the best possible service. You should interview your on-line Real Estate Agent and ask if he or she will personally take care about you or will refer you to another agent who will take care about you. If the agent will refer you to another agent, ask  what will be the referral fee to the recipient agent. The common referral fee is 25% and agents who are involved in the selling process will never charge more than this amount.  Take care about your agent who is loyal and dedicated to you. Please contact me if you have any questions.

    Tell Me How Can I Improve HawaiiRealEstatePortal.com

    If you know of anyone looking to buy or sell a home, I'd be honored to assist. The greatest compliment to me is your enthusiastic referral! Mahalo.
     

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