Saving for a Down Payment on your Hawaii Kai Home

It's no secret that prices for Hawaii real estate are higher than most in the country, and our homes - condos and single family - in Hawaii Kai are more expensive than many other parts of Oahu. Here are some ideas on planning ahead to save for a down payment, so when you find your dream home in Hawaii Kai, you'll be financially ready.

1. Do some financial planning. How much home can you afford? What monthly payments including taxes, insurance, and homeowners fees (in a condo or planned community) are the maximum you want to spend on housing? Take that monthly amount, convert it to mortgage payment, and then see how much house you can buy based on the amount of down payment you can add to that. The conservative lending guidelines on FHA loans will limit how much you can spend, and require you to pay monthly private mortgage insurance (PMI), if you put less than 20% down. But PMI is tax deductible and eventually goes away. Still, 20% or more is a good guideline in today's mortgage market. That may sound high but - rates are at historic lows.

2. Get the highest rate you can with any savings. Shop rates, both with your local banks and online. You don't have to put all your savings in one financial institution paying low rates. Be proactive.

3. Sell what you don't need. You will be moving anyway when you find the home you want to buy, so start cleaning out your stuff now. Use eBay, or Craigslist, and make a little extra money.

4. Consider a part-time 2nd job. Many folks in Hawaii already have 2nd and 3rd jobs, but if you have time, try an online source to make a little more take home pay. There are plenty of sites where you can register your skills as a freelancer.

5. Check with me for local or state home buying programs. You may qualify for federal or state assistance.

6. Investigate sources for borrowing - either against your IRAs or 401Ks, or that rich relative (who might even gift you some money in return for tax savings).

7. Consider bringing in an investor. You can buy him or her out when you can afford to, or use part of the home for rental income.

Plan ahead to buy that beautiful home with an ocean view in Hawaii Kai. Call or email me to talk about your options, and for recommendations for experienced local lenders who know the requirements. You may be able to be a homeowner sooner than you think.