It does not matter if you are looking for a first home for you and your family or if you have been saving up for that perfect vacation home, this guide to refinancing, mortgages, and home equity loans in Honolulu, HI is here to help.
It is true that the housing market in Honolulu is one of the most expensive in the nation, but when you look around, it is easy to understand why. Space is very limited on the Hawaiian island but that does not mean you cannot get your piece of paradise; it might just cost you a little more.
Some things, however, are the same no matter where you get your refinance, mortgage, or home equity loan. Since almost all transactions come from the bank, you will be expected to pay closing costs. Your lender is required to hand over a document called a good faith estimate. This document will outline how much your loan will cost including closing costs. The reason why the good faith estimate is so valuable is because you can take it from lender to lender and compare estimates to see which lender is going to offer you the best loan overall. You can compare every aspect of the loan including interest rates, the term you want, and the fees involved.
There are even times when you want to pay more closing costs then you have to. It is called buying points, and it can save you thousands of dollars on your next mortgage or refinance. Buying points is the practice of paying extra “points” up front in exchange for your lender lowering your interest rate. A point is one percent of what you borrowed. So, if your mortgage is for $100,000, one point would be $1,000. It sounds like a lot of money, but when you look at the long term and you realize how much you can save by lowering your interest rate by a fifth or a sixth of a point, you will save a lot of money over the life of your loan. Not all lenders are open to this option, but many are, you just have to ask for it.
There is one more trick you can use to rid yourself of closing costs. It is called a “No Closing Cost Mortgage,” and it is a popular choice for many people. The closing costs associated with your loan are rolled into your mortgage, so you have no up front costs. This option is a good choice for people who have used all of their funds on a down payment or on buying points to lower their interest rate. By rolling your closing costs into your mortgage, you can pay them off a little at a time, and there is no out of pocket cost on the day of your closing. Ask your lender if they offer this option. It can be a great way to buy a home or refinance now and spread the cost out over time.
If you would like more information on getting a refinance, mortgage, or a home equity loan, click here and one of our experts will contact you within a few short business days.
