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First Time Home Buyer in HawaiiIf you are looking to buy your 1st home, you've come to
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Today’s Rates for First Time Homebuyers in Hawaii

Sunday, July 21, 2024

Mortgage rates are at 3.00% for the 30 year fixed loan program and at 2.56% for the 15 year fixed. As for variable rates, the 5/1 ARM rate currently stands at 4.56%. Check out FHA and VA rates as well if you are doing low or no down payments.

Hawaii First Time Home Buyer Checklist

  1. Do some loan program research to see which may work best for you. If you're moving to a USDA-eligible area, you may qualify for a zero down payment loan. Veterans may be eligible for VA loans, which do not require a down payment. The content in the paragraphs below should give you an idea of where you may fit. 
  2. Know where your credit stands. Your score should fall somewhere above 600, but some lenders accept scores in the high 500s. If you don't , work on improving it before you try to take out a mortgage. Once per year, you may request a free credit report from the three major credit bureaus.
  3. Request interest rate quotes from different lenders in your part of Hawaii. Choose one who not only provides a great number, but carries an A rating from the Better Business Bureau.
  4. Get pre-qualified or pre-approved. Once you've settled with a lender, provide income documentation with your last two pay stubs and tax returns from the past two years. 
  5. Calculate a budget. Often, first timers are pre-approved for a loan amount that is bigger than they had anticipated. It is wise to base affordability not on the sum provided, but what you can truly afford given your monthly obligations and general spending habits. 
  6. Time to start home shopping. In the meantime, avoid making extravagant purchases, taking out new installment loans, or anything else that could weaken your bank accounts or credit. Lenders will check again before closing your loan, and big spenders may have their mortgage denied. 

Low Down Payment Loans Through FHA

If you’re a first time home buyer without a lot to put down, a Hawaii FHA loan may accommodate you. FHA loans are backed by the government and designed to help home buyers with limited upfront funds receive financing.

  • Down payment: 3.5%
  • Minimum acceptable credit score: 580 (varies)
  • Mortgage insurance: Upfront (1.75% loan amount) and monthly
  • Property guidelines apply and are verified via home inspection

You can find additional information about FHA loans on the Hawaii page of the FHA website.

No Down Payment Loans Through USDA

The United States Department of Agriculture backs home loans for zero down to Hawaii home buyers looking to move to or live in rural areas. Find out if your buying city is eligible by searching the USDA's property map. Note that popular areas like Honolulu are not eligible. 

  • Down payment: None required; financing up to 102% available depending on home appraisal
  • Minimum acceptable credit score: 620
  • Mortgage insurance: Upfront (2% loan amount) and monthly
  • Income maximums apply 

Hawaii Grant and Assistance Programs

The Hawaii Housing and Finance Corporation offers the Mortgage Credit Certificate (MCC) tax credit to low or moderate income families. The tax credit program is not a loan, but an incentive which allows participants to claim a portion of their annually paid mortgage interest and reduce their federal income withholding, in order to free up more monthly funds and keep up with a mortgage payment.

The MCC is not a loan, and income and property purchase requirements apply. However, there are no location restrictions, so popular areas like Honolulu, Koolaupoko, and Ewa are eligible. 

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user suit Lenders in: Hawaii.

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