It is not uncommon for people moving to Hawaii to initially consider getting financing from a lender or broker located outside of the state of Hawaii. With the best interests of our buyer clients in mind, Hawaii Realtors, if you ask, will likely tell you that you may save yourself a lot of time and stress if you use a local lender. Local lenders understand the Hawaii Purchase Contract and its contingencies and have established relationships with underwriters who are familiar with the unique aspects of the Hawaii real estate market–there are many!
This is especially important for anyone considering purchasing property on the Big Island of Hawaii. Here is one test for anyone thinking of using a mainland lender: when interviewing, ask your loan officer if he/she has ever successfully completed a loan for a property in a Lava Zone (yes, all properties on the Big Island fall into an assigned Lava Zone designation–and this is often a surprise to lenders who work outside Hawaii Island). If this is an unfamiliar concept for your lender and the underwriters with whom he/she works, then you can expect that you may have unnecessary delays throughout the escrow process when other issues unique to Hawaii arise. There certainly have been cases where transactions have fallen apart because Sellers give up on a Buyer who has requested numerous extensions while working with lenders unfamiliar with the ins and outs of Hawaii’s real estate market.
There are numerous local lending institutions and mortgage brokers on-island and ready to serve you–and your Realtor will be happy to provide you with referrals for lenders who understand the area where you are concentrating your property search. As a Buyer, consider interviewing a few local lenders to see who can best meet your needs—in the end, it may mean the difference between a lost opportunity or a successful close!
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