Updated 7/6/09 2:30pm Hawaii Time

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Frequently Asked Questions

Why should you sell your properties with a realtor?

There are many simple mistakes that individual home sellers can make that realtors are aware of. For more information go to this link.
Seven Selling Mistakes

Where should I go for escrow services on the Big Island?

Local Escrow Companies

First American Long & Melone Phone: (808) 961-3775 Fax: (808) 961-5989 1438 Kilauea Ave # 1 Hilo, HI

Island Title Corp (808) 961-4646 688 Kinoole St # 121 Hilo, HI

Security Title Corp (808) 961-5516 204 Waianuenue Ave Hilo, HI

Fidelity National Title (808) 935-0909 1255 Kilauea Ave., St. 200 Hilo, HI

First Hawaii Title 65-1291 Kawaihae Road #104 Kamuela, HI 96743 Phone:(808)885-4822 Fax:(808)885-8788

Title Guarantee Kileau Ave. Hilo, HI 96720

What kind of mortgage should I choose?

Choose a mortgage based on how long you expect to be living in the home, how much you can pay for upfront costs, your expected future income, and how much risk you are willing to take. For more information go to this link

What should I know about mortgages, before I sign?

Here are some mortgage terms you should know.

Adjustable Rate Mortgage (ARM)

Or Variable Rate Mortgage. A mortgage in which the interest rate is adjusted periodically based on a pre-selected index.

Annual Percentage Rate (APR)

An interest rate that reflects the cost of a mortgage as a yearly rate. This rate takes into account any points and fees and is based on the loan going to it’s full-term.

Assumption

An agreement between buyer and seller in which the buyer assumes responsibility for the seller’s existing mortgage. This agreement usually saves the buyer money because closing costs and the current interest rate, possibly higher, do not apply.

Buy-down

A method of lowering the buyer’s monthly payment for a short period of time. The lender or homebuilder subsidizes the mortgage by lowering the interest rate for the first few years of a loan.

Caps

A limit in the amount the interest rate or monthly payments for an adjustable rate mortgage that may change.

Closing

Also referred to as settlement. The meeting at the conclusion of a real estate sale in which the property and funds are exchanged between the two parties involved.

Debt-to-Income Ratio

The ratio, expressed as a percentage, which results from dividing a borrower’s monthly payment obligation on long-term debts by the borrower’s gross monthly income.

Discount Points

Prepaid interest assessed at closing by the lender. A point is equal to 1 percent of the loan amount.

Down Payment

Cash paid by the buyer at closing that makes up the difference between purchase price and the mortgage amount.

Earnest Money

Money given by a buyer to a seller as a deposit to commit the buyer to the future transaction. Earnest money is subtracted from closing costs.

Equity

The value an owner has in real estate over and above the obligation against the property. Equity is fair market value minus the current indebtedness.

Escrow

Funds given to a third party which will be held to cover payments, like tax payments, insurance payments, and or earnest money deposits.

Fixed Rate Mortgage

A mortgage in which the interest rate remains constant throughout the life of the loan.

Loan-to-Value Ratio

The ratio between the amount of the mortgage loan and the appraised value of the property.

Market Value

potential price that your property is worth on the market.

Mortgage Insurance

Insurance that protects lenders against loss if a borrower defaults. Required with a loan-to-value ratio of more than 80 percent.

Origination Fee

A fee charged by a lender for processing a loan application. This is usually a percentage of the loan.

PITI

Refers to Principal, Interest, Taxes, and Insurance.

Underwriting

The process of determining if you qualify for a homebuyer loan.

Variable Rate Mortgage

Or Adjustable Rate Mortgage. A mortgage in which the interest rate is adjusted periodically based on a pre-selected index.

Information courtesy of 2005-2008 Hawaiian Island Homes LTD.

More Information

For information specific to Hawaii go to Hawaii Real Estate and general Information

Buyer Beware Article by Honolulu Advertiser

General questions can be directed to: arielmurphy@hawaii.rr.com

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