Financing in Hawaii
When we were just married and starting our family, an incredible opportunity arose for us to buy the house we loved and currently lived in. We were renting, and kind of half arsedly looking for a place to buy. I liked almost every house we looked at, but Uncle would say, “too hot”, or “junk”, or “no more lichee tree”. Then, the owner of the house we lived in offered the house to us for a great price (Hawaii prices in the 1980’s were good) of $165,000.
So, we did what almost all local young couples do – ask our parents for help with the down payment, and get a loan for the rest. Because it was our very first time borrowing money from the bank for such a large amount, it was a big learning curve and a great victory when the loan was approved and we signed an inch of paperwork.
Now, financing is a different animal. After the sub-prime loan fiasco that resulted in thousands of foreclosures, banks’ underwriters are like bloodhounds looking for a reason to deny your loan. You must be very diligent in knowing where every dollar was spent and keep copies of any check deposits. However, only give them what they ask for, otherwise you open up a can of worms and they want documentation for a whole bunch of other unrelated stuff.
I have been unimpressed with Bank of Hawaii, the “best” bank in the nation. I thought loans were how banks made money. I also thought loyalty to a bank should give a lot more credence to service and help streamline the process. Although it would be convenient to have my banking and mortgages at the same bank, it didn’t happen, for whatever reasons. [Update, Bank of Hawaii has gotten better at lending now. Which goes to show that it pays to ask around because institutions change their policies all the time.]
Cyrus Robinson at Territorial Savings Kahala branch is great to talk to. It’s nice to have the branch manager as your point of contact. I had my call returned immediately by him, and 4 loans processed, all at the same time. Unfortunately that meant 4 hits to my credit score at the beginning and at the end of the loan approval process, but the main thing is the loans were approved. I love the tellers at the very small Kahala branch. All of them happy, fast with their fingers, and very nice. I just opened a new business checking account with them – very easy, very fast, very personable. This might not be the biggest bank but they sure know how to make you feel like family.
Robert Kiyosaki stated that the most important question to ask a loan officer is if their income is based on salary or commission. The one you want is a person who is paid on commission. They are more driven and able to find you what you need rather than be constrained by their employer’s restrictions and rules.
We currently use Noreen Ho, a loan officer with Savvy Realty and Loans who also performs as a traveling notary public. Noreen is sharp, focused, and has never disappointed. Her email is firstname.lastname@example.org, phone (808) 398-8528.
Hard money loans. Yikes. In this I am like a chicken. High interest, high points, short term, with almost the same scutiny and qualifications of a bank. Maybe I need to get over it, but for now, I’m not ready to deal with that venue. On the flip side, being a hard money lender does sound appealing….
Joint ventures – this is something I am really really thinking about. There are a myriad of ways to enter a joint venture. Uncle and I are maxed out on conventional loans. Someone who doesn’t have many loans can qualify and get conventional loans. This takes a bit of time on my part to learn how to do joint ventures where everyone wins. Currently, we are participants in joint ventures with Real Deals Hawaii, with them in the driver’s seat. For now, it’s good. In the future, we might want to call out for fellow investors to enter a joint venture with us. I’ll let you know when we do.
Tempting, but full of tension, are those blank checks the credit card companies send to us. 0% financing for a year with a 4% transaction fee, or 3.99% interest with no transaction fee. I suppose they are good for short term use, and I keep all the offers in a drawer, just in case. This is potential good debt that can turn ugly if it isn’t paid off by the end of promotion date.
Check the newspaper and see what is out there. I just saw an ad from First Hawaiian Bank offering a 30 year conventional mortgage with zero points! That is pretty awesome. Bank of Hawaii has a 1.99% HELOC for the first year. Haven’t really looked into more ads, but I will and suggest you do too.