Mortgage Loans in Hawaii

Areas We Serve

Whether you are looking to purchase a home on the mainland or one of the Hawaiian Islands, Griffin Funding can help you with your mortgage. We can assist future homeowners anywhere in the state, including:

Learn more about our customer-centric Hawaii home loans by speaking with one of our loan officers today.

Buying a House in Hawaii

In many ways, buying a house in Hawaii is a similar process to becoming a homeowner in another state. However, in other ways it varies greatly, including the fact that you need to consider:

Requirements to Buy a House in Hawaii

1. Land ownership laws: There are laws that dictate which land can be owned and which can be leased. This may affect how long you can hold the property and what you are able to do with it. It is important to know whether your property is designated as “fee simple” or “leasehold”. We cover this in greater detail below.
2. Lava zones: Homes in designated lava or hazard zones are high-risk, and as such, they are typically more difficult to finance.
3. Hawaii is a “good funds state”: All funds must be transferred to the title company by closing. It is important to note that certain mainland banks may not transfer the funds until the closing date, so it could delay the process. Griffin Funding offers a cash-out option in which funds can be wired the same day.
4. Cost of homes based on location: As with any property, location can play a large role in overall cost, and subsequently increase the cost of your mortgage. In Hawaii specifically, areas in cooler temperatures will typically incur a higher cost.

Taking these factors into account and understanding how to minimize your costs can help you secure a more affordable mortgage rate.

Hawaii Land Ownership: Who Can Own Land in Hawaii?

As we previously mentioned, there are certain laws in the state of Hawaii that can affect your ability to own property. Many buyers in the early stages of the homebuying process are unaware that the State of Hawaii or the Federal Government owns a large portion of the land.

However, you can arrange a leasehold, which provides you with the right to use the land for a certain amount of time. The duration of your agreement must be longer than your mortgage and is arranged with the entity that owns the property. For example, if you have a 30-year mortgage, your leasehold agreement must cover a 40-year period. Typically, these properties are listed at higher prices because a new agreement must be formed.

That said, there are opportunities to own Hawaiian land outright. This is known as fee simple property. When you purchase a fee simple property, you will be awarded the title to the property and the right to use it as you would like, including selling it to another owner in the future without them having to renegotiate any terms.

Cost of Housing in Hawaii

The median listing price for homes in Hawaii is $855,259 as of October 2024. Of course, Hawaii is a highly desirable place to live given its tropical climate and natural beauty, so homes there demand a high price relative to much of the country. Nevertheless, borrowers can potentially lower the upfront costs of homeownership by going with the right financing strategy.

It is also important to keep in mind that the price of homes is highly dependent on location, size, and amenities. Depending on your housing budget, you may need to adjust your search.

How Much is a Down Payment on a House in Hawaii?

The down payment on a house in Hawaii will depend on the price of the home. With a conventional loan, highly qualified borrowers can get a mortgage with a down payment as low as 3%. However, borrowers must put down at least 20% of the home’s purchase price in order to avoid private mortgage insurance.

If that number is out of your price range, it does not mean you need to give up your search. Griffin Funding offers loan options that require significantly lower down payments. For instance, qualifying borrowers can secure a mortgage with no down payment using a VA loan or USDA loan. Alternatively, first-time buyers and those seeking out flexible credit requirements may turn to FHA loans, which offer down payments as low as 3.5%.

Keep in mind that these are only examples. To determine the cost of your down payment, you should contact a loan professional.

What Factors Affect Hawaii Mortgage Rates?

Traditionally, the factors that are considered when preparing mortgage terms include:

Mortgage Term Considerations

1. Credit history: A credit score below 620 or a recent credit event can make it difficult to qualify for a mortgage. Keep in mind, though, that some mortgages have more lenient credit requirements. For example, VA loans, FHA loans, and recent credit event loans all allow for lower than average credit scores.

2. Income: A borrower’s income level can impact the rate they qualify for. While traditional mortgages require borrowers to prove their income through tax returns, we offer alternative lending options like bank statement loans and DSCR loans, which gauge income without looking at one’s tax returns.

3. Debt-to-income (DTI) ratio: Many traditional lenders require a DTI of 43% or lower for most loan types.

Many buyers find that the terms offered to them based on these aspects of their profile are tough— if not downright impossible—to afford. However, Griffin Funding offers a range of Hawaii home loan programs that make homeownership much more feasible for those who do not meet the traditional requirements.

Hawaii Mortgage Programs

• Bank Statement Loans in Hawaii: If you are an entrepreneur and your gross income is not adequately reflected by traditional income verification methods, a bank statement loan may be your solution. This type of loan allows you to qualify based on 12, or 24 months worth of bank statements. Bank statement loans are one loan type available to Hawaiian self-employed business owners. There are many different types of Hawaii self employed mortgages available in addition to bank statement loans.
• FHA Loans for First-Time Buyers: Backed by the Federal Housing Administration, these loans are designed for those who do not have enough saved for a traditional down payment. With an FHA loan, your down payment could be as low as 3.5%.
  • Fortunately, FHA loan limits have recently increased, meaning more homeowners can have the opportunity to buy in regions of Hawaii that may have previously been excluded. For instance, FHA loans for Maui can go up to $1,924,100 for a multi-unit property.
• VA Home Loans in Hawaii: If you are a veteran, a VA home loan can help you purchase a house or refinance your existing mortgage with better interest rates and no down payment (up to the $1,149,825 loan limit set for 2024).
  • If your loan exceeds this limit, you will be required to make a down payment of 25% of the difference between the purchase price and the loan. Fortunately, this amount is typically much lower than the standard 10% or 20% down payment traditionally required on the purchase price.
• Conventional Loans for Second Homes: If you want to purchase a second home in Hawaii so you enjoy the island life when you want to, while renting it out the rest of the year, you should consider one of our conventional loans. This will allow you to secure an investment property or vacation home while taking advantage of our competitive interest rates.
• ITIN Loans: With ITIN loans in Hawaii, non-residents and non-citizens can open up a pathway to purchasing a home in the state.
• DSCR Loans: Real estate investors who invest in rental properties in Hawaii can qualify based on the property’s gross rental income rather than their tax returns or W2s. DSCR loans are one type of Hawaii investment property loan available to investors.
• Asset Based Loans: High net-worth individuals or retirees in Hawaii can qualify for a home loan based on their liquid assets. Assets do not need to be pledged and you do not need a job.
• Home Equity Loans: If you already own a home and you have built up equity in your house, you may benefit from a home equity loan, where you can take cash out from the equity in your loan without giving up the interest rate on your first loan. Home equity lines of credit (HELOCs) are also an available option to Hawaiian homeowners with equity.
• USDA Loans: There are a few locations in Hawaii that could qualify for a USDA loan. These loans are designed to benefit low-to-moderate incomes looking to purchase a home in a rural area.
• Private Money Loans: Private or hard money loans are short-term loans from private lenders rather than traditional banks, typically used by real estate investors. Instead of focusing on your credit score, these loans are secured by the property’s value, making them easier and faster to qualify for when you need quick funding. Hard money loans usually come with higher interest rates and shorter repayment terms, but they can be ideal for projects like property flipping or quick refinancing.

In addition to flexible terms, our team is dedicated to exceptional service, finding you the lowest interest rate possible and completing the process within 30 days. To learn more about our mortgage options, submit an application online or speak with one of our loan officers today by calling (855) 394-8288.

Apply for a Hawaii Mortgage

Griffin Funding has helped many prospective homeowners find Hawaii home loans suited to their needs. Now, it is your turn to secure a mortgage that allows you to fulfill your dream of homeownership in the Aloha State. Take the first step by reaching out and scheduling a free consultation.

If you still have questions about Hawaii mortgages, a member of our team will gladly assist you.