This article originally appeared in Waikoloa Whispers, a privately-owned publication distributed to Waikoloa residents. Posted here with permission from the Editor, Phyllis Ann Knauf…Al assures us he asked!
Al Knauf R(S) Kohala Coast Mauna Lani office
Part 1: Mortgage Plans to Consider
Part 2: Waikoloa Village Real Estate Update – May
Mortgage Plans to Consider
30-Year Fixed Rate Loan: The 30-year fixed-rate loan is the most traditional and conventional product on the market. The interest rate associated with the loan is “fixed,” which means that it will not change over the course of that period. The loan payment never changes.
Adjustable-Rate Mortgage: An adjustable-rate mortgage (ARM) still has a place in mortgage financing. This is a mortgage that changes rates over the course of the loan. The initial term is 1, 3, 5, 7 or 10 years. The interest rate then changes to a higher rate. An adjustable-rate mortgage can be right for buyers who want a lower payment now, even though they can afford a higher payment.
Convertible Mortgage: These are ARM loans that allow you to covert to a fixed-rate loan at or before a specified time. It lets you start off with a low variable rate, then lock in a fixed rate at a later date.
Interest-Only Mortgage: An interest-only mortgage is a mortgage where the buyer is only paying the interest on the loan every month. Most interest-only loans will, at some point, require the buyer to start paying down the principal; however, for the interest-only period (which could be as long as 10-years), the borrower only has to pay the interest to the bank. At the end of the interest-only period, the buyer owns very little, if any, of the home. If real estate values rise, the homeowner might be able to make a profit. However, if values drop, the homeowner could end up with no equity in a house worth less.
Why consider an FHA loan? An FHA loan may be a good choice for people at all income levels. It requires a down payment of only 3.5 percent. FHA terms allow you to include closing costs into the mortgage. In later years, it provides cash-out refinancing for things such as college or home improvements. As with any loan on which the down payment is less than 20 percent of the home’s value, mortgage insurance is added to the monthly payment. In addition, 1/12 of the annual homeowners insurance and property taxes are added to the monthly payment.
Waikoloa Village Stats for May
RESIDENTIAL:
Available: 60 Last report: 74 Lowest: $199,000 Highest: $795,000
In Escrow: 27 Lowest: $179,000 Highest: $649,000
2010 Sales: 25 Lowest: $239,900 Highest: $518,000
CONDOMINIUMS:
Available: 50 Last report: 61 Lowest: $89,000 Highest: $635,000
In Escrow: 16 Lowest: $83,900 Highest: $325,000
2010 Sales: 10 Lowest: $89,000 Highest: $380,000
VACANT RESIDENTIAL LOTS
Available: 20 Last report: 22 Lowest: $69,000 Highest: $425,000
In Escrow: 7* Lowest: $99,900 Highest: $120,000
2010 Sales: 8 Lowest: $72,000 Highest: $102,000
*There is one additional lot in escrow consisting of 12.28 acres along Eleele Street that has “preliminary approval and engineered for a 22-lot subdivision.”
Note: Numbers above based on MLS data as of 5/29/2010. Al’s Waikoloa Whispers article also contains 2009 sales stats for comparison. To receive a copy of the printed article, please email Al. For inquiries about Waikoloa Whispers, please email whisperswaikoloa@aol.com.
