Get Ready for YOUR New Home!!!

First Time Home Buyers: There are a few things that are extremely important to remember in buying your first home, once you are in escrow.

There will be a timeline that is generated, usually by the escrow company. These are deadlines that have to be met in order to keep to the purchase contract. Make sure your real estate agent is meeting the deadlines. Usually, the agent is very aware of the deadlines, but it’s always good for you to be aware too.

One of the items on the timeline is the home inspection. It is important to have a professional do this, someone who is knowledgeable about building structure, electrical wiring, plumbing, roofs, and all the many things that make up a house or condo property. It is important for YOU to be at that home inspection, so that you can ask the inspector questions about what you are seeing…

Another important date is the final walk through. This is usually done about five days before the closing of the property, just before the property becomes YOURS. If repairs had to be done, were they finished? Was there personal property that went with the home? Is it still there? Were there items that were supposed to have been removed from the property? Are they gone? If you are satisfied with the state of the property, you can be assured that it will be just that way when you take possession in a few days. If you are not satisfied, you will need to discuss with your agent what things still need to be done…

Buying a home for the first time is a huge undertaking, and can be scary. A good real estate agent can help you through the process, answering questions and helping to alleviate your fears. If you need a good agent, call me, and I can help you. Tiare Dutcher 808-753-5327.

Wondering which direction are interest rates likely to move in the next year?

Guy Cecala, CEO of Inside Mortgage Finance believes:
The Federal Reserve launched a program to buy $1.45 trillion of mortgage securities this year, and it has helped to keep interest rates at—or near—historically low levels. But the money should be used up by the first quarter of next year. Interest rates are then likely to rise, possibly increasing to a full percentage point by the end of the year.
Federal Reserve Bank of St. Louis President James Bullard believes:
Past experience suggests policy makers may not start to raise interest rates until early 2012, while concern borrowing costs have stayed “too low for too long” may prompt an earlier move.
There are several different factors that drive the movement of interest rates. Activity in the purchase/sell of 10 year Treasury Bond, economic news such as unemployment, what the Federal Reserve Bank decides to do with the Fed Fund rate, and many other factors.

Which direction do you think mortgage rate will move?

- Linda Le, Loan Officer, Pacific Access Mortgage, 808-561-5943

Hawaii Real Estate Market at A Glance

In October, single family home listings were on the market an aveage of 52 days before received an accepted offer and going into escrow.

Condos were on the market for an average of 47 days before going into escrow.

This represents a very brisk market since 60 - 90 days represents a normal market demand.

One factor affecting this brisk market is the low inventory of homes and condos available.

In October, there were 1282 single family homes avaialble for sale. This is the lowest inventory since Sept of 2005. There were 1828 condos for sale. Thats the lowest inventory since Nov of 2005.

With these low inventories, it's imperative that home buyers have a Realtor to keep them abreast of properties that meet their needs when they come on the market since the demand is still very high, especially for homes in the $300K to $700K price range and condos in the $200K to $500K range. Homes and condos in these price ranges that are in above average condition generally received multiple offers.

If you're looking for a home in these price ranges and need assistance, call me at 351-1507.

The Changing Landscape of Lending

Underwriting Guidelines have changed quite a bit and it keeps changing. A few of the major changes are Debt-to-Income Ratio, how long credit documents are good for, use of retirement, stock and bonds as assets, credit score minimum, and verification of employments.

Below is an example of how this will affect the borrower:

· Debt-to-Income Ratio – A Debt to Income Ratio is calculated based on the amount of gross income in relation to the amount of monthly debt obligation (credit card bill, car payment… etc). Previously lenders were allowed to go rather high on the ratio. Up to about 55% debt to income ratio. The new change is 45%. How will this affect the borrower? The borrower will be qualified for a lower loan amount.
· Credit documents – Credit documents such as the credit report will go from 120 days to 90 days. This means you’ll have to updated your information to the lender as it will only be good for 90 days.
· Assets – Lenders were able to use 100% of the fund in stock and mutual accounts and 70% for retirement fund. Now, they are only allowed to use 70% for stock and mutual fund accounts and 60% for retirement. If you are planning on using funds from either account to show proof that you have enough cash for closing cost, you’ll have to make sure that there is more than enough or cash out on it and transfer it to a savings account (which the lender can use 100% of the fund).
· Credit Score – Minimum credit score is 620. Make sure FICO scores are high. The higher the score the better.
· Verification of Employment – Make sure that there are no furloughs or projected furloughs (unless they have been account for at the beginning of the loan process). The stability of your job is very important so make sure everything stated on your loan application can be verified.

More changes will be announced in the next few months. For more information, please call Linda Le, Loan Officer at 808-561-5943 Stay tune for more…

The Tax Credit is Back!

First Time Home Buyers---it really is YOUR time to buy a home! And just to remind you that a first time home buyer is defined as not having owned a home for three years. So, if you’ve owned a home before, but have been renting for the past three or more years, you are considered a FIRST TIME home buyer!!

The deadline for the purchase of that home has now been extended, and expanded! You can still get that $8,000 tax credit if you close on your home by July 1, 2010. You must have an accepted contract on or before April 30, 2010. This gives you 61 days in which to close the contract. Not a lot of time in this day and age. Because of all the people who are trying to take advantage of this tax credit, the lenders, appraisers, and all the other people who need to process your transaction are overloaded.

Also, the income limits the new tax credit has placed on first time home buyers have been expanded. The limit was $75,000 for a single person, $150,000 for a married couple. That limit is now $125,000 for a single person, and $225,000 for a married couple.

In addition, where there was no restriction on the cost of that new home, now it cannot be greater than $800,000.

So, first time home buyers, get out there and find a property. I would love to help you find something. Please call me. Tiare Dutcher 808-753-5327.

Uncovering a Best Buy Property!

There are number of ways to determine if a property is a best buy. As previously mentioned there are three popular approaches: 1.) for investors, rental property that yields a positive cash flow with minimal down payment. 2.) Property where the asking price is substantially below like kind homes that have sold within the last six months. 3.) Property where the quality or condition is above average, in a highly sought after area, in a neighborhood where the inventory for sale is relatively nonexistent and are selling at or below market value.The following is an example of the first approach. In Waikiki, Oahu there is a unique category of property called condo-hotels. These are hotels where the rooms in most cases are privately owned and leased back to the hotel or to a management company. However, some find it more profitable to manage the units themselves. Some of the more affordable and attractive buys are studio or one bed room units that have full kitchens.

In today’s market condo-hotels have unique financing issues. Due to various stigmas associated with transients and other uncertainties banks are reluctant to provide financing. As a result the prices for these types of purchases have dropped considerably. So in order to get into this lucrative market cash offers and seller financing is the order of the day. For those individuals who are able to maneuver in these waters it can be very rewarding. If you are interested in learning more about this unique market please feel free to contact Abron Toure at the Coldwell Banker, Waikiki Office my cell is 503 475 6872. Mahalo!

Hawaii Real Estate Market Update

This past week was a good one for Hawaii real estate news.

The October Statistical Report showed the following positive factors for Oahu's real estate market:

281 Single Family Homes sold. This is up from 243 last October. This is the second consecutive month that home sales have improved vs prior year.

381 Condos sold. This is up from 316 last October. This is the third consecutive month that condo sales have improved vs prior year. This indicates a trend.

The median sales price for single family homes was $605,000. This was 15.6% under prior year's median price of $625,000.

The median sales price for condos was $295,000. This was 9.2% below prior year!


While unit sales out pace prior year, median sales prices are still going down and haven't quite levelled off yet. These indicators verify that this continues to be an EXCELLENT time for QUALIFIED BUYERS to purchase a home.

This along with the extension of the First Time Home Buyer credit to April and the expansion to include home owners that have lived in their homes for 5 of the past 7 years who are purchasing a home, adds more potential Buyers to the mix. This will create more impetus to positively effect the recovery of the residential real estate market.

If you're ready to take advantage of the new Extended and Expanded Home Buyer Tax Credit Program call Dwight Ellis at 808 351-1507.

Next week we'll discuss Days on Market, Months of Remaining Inventory and Neighborhoods to watch.