April 11, 2011

Seven Types of Hawaii Real Estate Financing

Can you still remember when the definition of Hawaii real estate financing was saving up the money to put down 20% to buy a house? Then you took out the mortgage for the rest of the 80%? Guess what? You can do that still today if you want, but one good thing about your situation today, is that you have way more options than ever before. I'm going to list seven of them for you:


No-doc Loans - A low-doc loan is one with 'no' or just 'low' documentation requirements. These types of loans have made a come-back and can be found being offered by online banks. They're designed for those with bad credit, but who are still able to come up with 20-30 percent for a down-payment. You can do this even without having a job.


Land Contract - This is referred to as 'contract for sale' and a few other names too, depending on where you are. It simply means you will make your payments to a seller rather than to a bank. You will have to negotiate your terms, your interest rate, and your down-payment amount with the seller.


Gifting Programs - In some places, there are builders who fund foundations. These foundations offer to give you a specific portion of your down-payment to help you move into a new home with as small as a 3% down-payment out of your own pocket. The FHA along with some other lenders have approved of this thus far, or allowed it.


FHA Loans - Your local Farm Home Administration won't actually be loaning you the money, but they'll guarantee it for the bank, enabling them to loan as much as 97% of the total purchase price. This depends on the specific FHA program used.


VA Loans - If you've served in the U.S. Armed Forces, and have an honorable discharge and a halfway decent job, you'll probably be able to get yourself a home through a VA loan.


State Housing Programs - Nearly all states run some kind of financing help, in one form or other, of some loan-guarantee programs. Some states have outright loans designed specifically for low income buyers.


Credit Cards - This one is really risky. If you have a credit card with low interest, it can be used to make a down-payment. This works well when you're about to receive an income tax refund and can pay it off quickly. Banks most usually won't allow you to do this, but it can be combined with some seller financing.


There are plenty more ways of approaching financing for real estate, but these should get the ideas floating around in your mind.


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