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PCSing to Hawaii, Should I Buy a Home in Hawaii?

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Part of military life is the high percentage of receiving your permanent change of station orders.  This is also called PCS orders for short.  PCS is the military version of a job relocation over 50 miles away.  At least a benefit is that the military will pay for the move in these cases.  Typically, military families are given 2 – 3 months notice of the duty station change.  In order to have a smooth PCS transition, start planning and acting immediately.

After PCS Orders, 3 Decisions to Buy a New Home

For the end result of buying a new home, there are important decisions to make.  First of all, what should you do with the current home?  Renting or selling the home will affect the new home purchase in several ways, but either could work.  Next, is to choose an experienced Realtor local to the new duty station.  It is very helpful to work with a real estate agent who is experienced in the military PCSing process.  Finally and equally as important, is to choose a VA mortgage lender experienced in the PCS process and the VA loan options available for every scenario.  So let us help in explaining the VA loan options for PCS’d service members, plus how these options work.

Should I Rent Out or Sell My Home After Receiving PCS Orders?

Service members need to make some key decisions within a short timeframe after receiving PCS orders.  Often to purchase another property, buyers need to rent or sell the current home.  In order to make this decision, there are several factors to consider.

  1. Is there equity in my home so I can sell it?
  2. How quickly can my home sell?
  3. If bringing money to the sale, can I do it?
  4. Do I want to be a landlord?
  5. How does renting or selling my home affect buying a new home?

While making the decision to sell, it is paramount to choose a listing agent that is familiar with this PCS process.  Additionally, look for real numbers on your house.  A reputable Realtor will show you documentation to back up a listing price, plus expected sales turnaround.  Of course, not all markets support a fast closing.  Plus, there may not be enough equity in the home to sell.  One of the worst things would be to plan on selling at a certain figure to find out in a few weeks, there must be a drastic price reduction.

If selling is not an option because of a slow market or limited equity, renting could work.  Maybe the rental market is strong for the area and becoming a landlord fits the military family’s goals.  Check out a recent article “How to get into real estate investing and build wealth“.  The article discusses potential for starting a real estate portfolio.

Conversation with your VA Loan Officer

Lastly, speak to your mortgage loan officer for the new purchase.  Thoroughly discuss how renting or selling the current home affects the VA entitlement and VA loan qualification.  VA will allow 100% of the new contract rent payment to offset the mortgage payment inclusive of principal, interest, taxes, and insurance.  This could help a service member use VA again to buy a home, which we discuss in more detail below.

Choosing a Real Estate Agent at the New Duty Station

Beginning the home buying process from afar is tough.  Plus it takes a lot of trust and nerves.  Starting the process by looking at pictures online but not knowing anything about the area is difficult.  So that is where a local, experienced real estate agent needs to be your eyes and your guide!  Begin with creating a list of your wants, needs, and a budget.  Next, interview agents in the new PCS’d area and see which one exceeds the others in your opinion.  Relay your list to the agents and once the Realtor is chosen, the agent should start sending houses which meet your criteria.  Because of the relocation situation, Realtors in these cases are depended on more than a traditional purchase.  This is especially important on a fast moving market as the buyers may go under contract without even seeing the house in person.  Talk about trust!  That’s why choosing an agent that is experienced and fully understands your family’s needs is so important.

Keep in mind that a buyers agent will require a prequalification letter from a reputable lender.  Plus it is very important for the buyers agent to have a detailed discussion with the loan officer.  The agent, loan officer, and buyer will have thorough discussions to organize a plan.  Part of this plan is deciding on VA loan options to meet the overall goals and path of the prior home.  So let’s discuss those.

VA Home Loan Options After PCS Orders

Luckily military families have access to probably the best mortgage loan type available.  Because of the no money down option and no monthly mortgage insurance, it is a very attractive option.  But often it is not as easy as “Just give me the VA loan option”.  Especially in the case of a PCS scenario as there is usually another property in the mix.  How much the prior home rents or sells for plays a huge role in the new VA approval.

How to Use a VA Loan While Renting Out Prior Home

One of the first questions an experienced VA loan officer will ask would be the plan for the current home.  In this case, if the home will be rented, VA treats this very favorably for the buyer.  Let’s say the current home has no equity and the total mortgage payment is $1000 per month.  Then if the PCS’d family rents out the current home for $1000, VA considers the payment covered.  We would not have to count a payment in a VA buyer’s debt ratio or residual income.  Therefore, it is much easier to qualify.

But if the current home has a VA loan on it, then a portion of the Veteran’s entitlement will be tied up.  Don’t worry though, because many are still able to purchase with no money down up to a certain amount.  The amount depends on the basis and bonus entitlement available.  Learn more about how VA Entitlement works which is displayed on the Certificate of Eligibility.  Plus we will request the COE for the buyer which is usually obtained online within a few minutes.

Renting Current Home and Using Another VA Loan

Many do not realize that it is very possible to have 2 VA loans at once.  So renting out the current home and having two VA loans at once could be done.  Having two VA loans at once requires accessing the buyer’s bonus entitlement or 2nd Tier entitlement.  Basically if the prior VA loan will not be satisfied prior to the new closing, part of the Veteran’s entitlement is tied up.  Therefore, a VA lender would use a calculation to determine the total entitlement available for the new purchase.  The entitlement and the purchase price will determine the amount of down payment if any at all.  Check out another article to learn more called, “Rent your current home and buy your dream home with no money down“.  Keep in mind this is for the conversion of a primary to a rental.  Once a home has already been a rental property for a bit, the tax return numbers must be used.

Selling Current Home and Using VA Loan on New Home

What if the current home is sold?  This will at least free up the VA entitlement towards the new purchase.  Keep in mind that both the sale and the purchase can happen on the same day.  Our underwriters would verify the eligibility would be freed up by the simultaneous sale.  But what if the PCS orders came not long after buying the prior home?  The family may have to bring some money to closing or maybe breaks even.  Again, at least VA offers a no money down option.

Using Seller Paid Costs and Sales Concessions After Receiving PCS Orders

Unlike other mortgage loans, VA allows the seller to pay all reasonable closing costs without setting a percentage limit.  In addition, VA will allow for the seller to pay up to 4% of the sales price towards sales concessions.  If buying after receiving PCS orders, there could be a creative strategy to help the closing happen.  The buyer may lack funds for some painting that needs to be done.  Maybe the buyer needs to pay off a debt in order to qualify or just feel comfortable enough to buy the new home.  That is where a knowledgeable realtor and lender, plus a willing seller could help make a closing happen for everyone.  Learn more about using sales concessions creatively here.

Additional Benefits of a VA Home Loan

  • Loans up to $1,000,000
  • Higher debt ratios allowed to 55%
  • 600 minimum credit score
  • Seller may pay all closing costs
  • Flexible guidelines for recent short sales, foreclosures, bankruptcy
  • Purchase VA approved condos
  • Favorable guidelines for deferred student loans

If your PSC orders have you relocating to a Hawaii contact our VA experts to discuss your PSC and mortgage strategy.


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7 Essential Tips for VA Home Buyers in Hawaii

home buyers

Veterans and military members understand the power of preparation better than most.

That’s good news considering most home buyers still lack a solid grasp of what it takes today to land a home loan.

VA loans tend to feature more flexible and forgiving requirements than other loan types. But this no-down payment program is also a specialized option for home buyers.

Here’s a look at seven essential tips for veterans and service members considering a VA home loan.

1. No COE to start

You don’t need your Certificate of Eligibility to begin. You don’t even need to know if you’re eligible for a VA loan to start.

Lenders will typically obtain this critical document for you using an automated system.

2. Pre-approval is critical

This shows sellers and real estate agents you’re a serious buyer. Some agents won’t even accept an offer on a home without a copy of your pre-approval letter.

Pre-approval also gives you a clear sense of what you can afford and how much house you can buy. The last thing you want is to get under contract only to learn you can’t afford the payments on the home.

3. Find VA-knowledgeable agents

Real estate agents play a key role in the home buying process. But some know VA loans better than others.

VA-savvy agents can help borrowers avoid properties likely to pose a problem for the VA’s appraisal process. They can also lean on their understanding of VA closing costs to maximize your dollar.

4. Prepare for upfront costs

Most VA buyers take advantage of the $0 down benefit. That’s a huge opportunity that helps get veterans into homes now.

But homeownership can come with other upfront expenses, from making an earnest money deposit and paying for an appraisal to possibly covering a portion (or all) of your closing costs.

5. Understand closing costs

You can negotiate with the seller to pay some or all of your closing costs. There’s no limit to how much they can contribute to cover loan-related costs.

In addition, sellers can pay up to 4% of the purchase price to pay for things like prepaid property taxes, insurance and HOA Fees.

6. Buying condos

Veterans can only purchase condos in VA-approved developments. Lenders can help try to get an unapproved one on the list, but the process can take some time. In Hawaii there are several VA Approved Condo Buildings.

Adjust your home-buying timeline accordingly.

7. Not a one-time benefit

Veterans can use the VA loan program over and over again. It’s even possible to have more than one at the same time.

Veterans who’ve lost a VA loan to foreclosure may be able to buy again, too.

Its great to plan ahead and know you have a chance at Home Ownership when you PCS to Hawaii.

For more information please feel free to contact us today.

Our Team with having over 45 years of experience helping Military Buyers and sellers in Hawaii, We would like to Thank you for your service.

Mahalo

Ryan Riggins (RA)

John Riggins Real Estate

808-330-9105


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PCS – Before and After arrival

You know when it comes to getting the correct info this is a great blog. Big Mahalo for sharing your info and your viewpoint on PCS here to Hawaii

PCS to Hawaii - a Military wife's Journey

We arrived in Honolulu on May 31 and I have a lot to share.  I’m going to start with the flight and finish up with what I’ve learned so far about  temporary lodging allowance (TLA), entitlements and reimbursements.

As I posted in my previous blog, animals traveling between May 15 and September 15 will need to be shipped as cargo.  Because of this, we had to be at Air Cargo 2 1/2 hours before our flight left.  We had a rental car since we shipped our POV out the day before we left.  We had intended to use curbside check in for our luggage, but when we tried, we were told by the Sky Valet that unless we checked our bags at the ticket counter, we would incur extra baggage fees even though we were allowed 4 checked bags each since we were traveling on orders.  I’m going to spare…

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PCS to Hawaii?

It seems so many military families are PCS’ing to Hawaii . It is because of this, that even though I absolutely hate this place that I feel it important to discuss some of the most important questions in relation to coming here. Throughout the months I have been listening and watching the Army Wife 101 fan page and I have compiled many of your questions for these types of posts. I hope you find it helpful.

In this post I will discuss questions in relation to housing and living offpost.

How long is the waiting list for housing onpost?

As I always tell spouses never ask another spouse that only because the wait time varies greatly. You will hear stories of people who PCS’ed here and within a a week they had housing. Then you will hear from those who moved here and lived in lodging for 2 -3 months. Your best bet is to call the housing office and they can give you a round about estimate. You can be placed on something close to a waiting list. When you arrive you will jump ahead of those who have NOT arrived on island yet.  As of the time this post was written you can call the main housing office at 877-487-4323 or visit their site at http://www.islandpalmcommunities.com

Where will I stay while I am waiting for housing?

This is a common question and in my experience I’ve learned you will hear various answers. The first place you definitely want to contact is Schofield Lodging. You can visit them atwww.innatschofield.com. The way it goes is that you need to contact them first and see if they have space available, if they don’t then they will issue you a statement of nonavailability and you will usually wind up at a hotel close to Honolulu Airport. You will hear some people say that they went and stayed at the freaking Ritz Carlton or the Hilton Hawaiian and the Army paid for it. My advice, do it the proper way this way you are guaranteed to receive your TLA and have no issues. PCS’ing to Hawaii is not the time to play around financially.

What does housing look like on Schofield?

Fortunately for me I live in new housing and I will post a few pictures of that below.  Unfortunately you have a great chance of being put in what they call “New Old Housing” which is not that bad in comparison to the old stuff that let’s just say you have to see it for yourself. Housing can also place you in what is known as military reservations. Wheeler is Schofield’s airfield and is right outisde the main gate. They have very new housing and extremely old housing. Let me just say when I say old housing I am talking about Pearl Harbor Era. Some of the housing on Wheeler are considered of historical value and cannot be torn down. At that point they try to revamp the inside but their is only so much revamping you can do to a house that old.

Helemano Military Reservation is about 15 minutes from post near the North Shore. I hear mixed reviews on it but personally Schofield is far enough , I wouldn’t want to be even further at Helemano. The other place they can place you at is AMR. I have friends who live there and they have new housing but there is old housing there as well. AMR is very hilly and high up , but the good thing is you are right near Honolulu . It seems like you have to go to Honolulu to have any kind of life here. Keep in mind in Hawaii military can live in any branches housing, but there are always stipulations on everything . For instance Army can live in Navy housing but they might not be able to get new navy housing.

Many wives ask me what housing areas on Schofield they should ask about when at the housing office. I always say Kaena, Porter, Moyer and Kalakua. Those are the newest housing areas to my knowledge.

Here are a few pictures of a new 3 bedroom home on Schofield in Kaena (my home)

You can view more here if you have Facebook

Do I keep my BAH when I live onpost?

Uh No…I wish! Now when I first arrived here, there was some pretty crappy housing that they actually were giving some onpost residents 15% of their BAH back. Generally speaking your BAH is taken out of your check and that’s that. if you live offpost you get to keep your BAH and utilize it as you wish for a mortgage or rent and possibly utilities.

Do we pay utilities onpost?

You can read my previous post about Mock Light Billing here.

In regards to other utilities it’s the same as any other post. You pay for your cable and phone. Water is free  I wonder for how long.

Who takes care of the lawn maintenance onpost?

I am still trying to figure that out myself because since my husband has returned from his deployment we have cut our own yard, Yet and still we see the landscaping guys in our backyard and cutting our bushes.

Best places to live offpost?

If had to live offpost the 4 places I would look into are Mililani, Ewa Beach, Pearl City, and Kapolei. If you wanna know about the site . Read my post about Offpost Housing. I know many people are quick to want to live off post but please be aware Hawaii is very expensive. I know because we looked and I gladly would take on post housing considering the prices, and the utility cost I have heard about here.

See there look at how fair I was and I didn’t even talk about how much I hate it here 🙂

I think I just about covered all the common housing questions. If I missed one feel free to share it in the comments section.

Thank you Army Wife 101 for this awesome post.


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Army Releases New PT Uniform Design

The U.S. Army rolled out its new physical fitness uniform Monday.  The new black and gold Army Physical Fitness Uniform, or APFU, will replace the current black and gray Improved Physical Fitness Uniform in 2017.

The APFU consists of a jacket, long pants, shorts, short-sleeve T-shirt and long-sleeve T-shirt. The new uniform is scheduled to cost about $3 less than the current uniform, Army officials said.

“Its design is based on soldier feedback,” Col. Robert Mortlock, program manager, Soldier Protection and Individual Equipment, said in an Aug. 11 press release.

The Army launched the APFU program after a February 2012 Army Knowledge Online survey of some 76,000 soldiers found that soldiers had issues with the IPFU, he said. They liked its durability but believed the IPFU’s textiles had not kept pace with commercially-available workout clothes.

Soldiers, both male and female, also had concerns with other things, particularly modesty issues with the shorts, especially in events like sit-ups, Army officials said.  The issue was of such concern that soldiers were purchasing spandex-like under garments to wear beneath the trunks, Mortlock said.

Another issue was that there were not enough female sizes in the IPFU, he said.  The APFU introduces multiple sizes, including female sizing, and has solved the modesty issue, Mortlock said.

PEO Soldier worked closely with the Natick Soldier Research Development and Engineering Center to develop a new PT uniform that met soldier concerns but did not cost more than the IPFU. The APFU met the goal of controlling costs and improving performance by adopting lighter high-tech moisture wicking fabric, Army officials said.

The fabric of the trunks will continue to be made with durable nylon fabric, but it is lighter than and not as stiff as the IPFU trunks. Also, there will be a four-way stretch panel inside the trunks, sort of like bicycle pants, which eliminates the need for soldiers to purchase their own under garments. The trunks include a bigger key pocket and an ID card pouch.

In all, some 34 changes were made to the new APFU. Officials said soldier feedback determined the form, fit and function of the APFU, but it also determined its look. Soldier feedback was also solicited about the design features as well as the preferred color scheme.

The Army made prototypes of the APFU in a variety of colors and designs and taken to a series of soldier town halls at Fort Hood, Texas; Fort Bragg, North Carolina; and Joint Base Lewis-McChord, Washington.

Then, the Army launched a second AKO survey, in which more than 190,000 responded, Mortlock said. Soldiers overwhelmingly favored a black T-shirt with gold lettering and a black jacket with gold chevron and the Army logo.

About 876 Soldiers at Fort Wainwright, Alaska, Join Base Lewis-McChord, Fort Bragg, Fort Sill, Oklahoma, Fort Hood and Fort Jackson, South Carolina, wore the APFU during PT for a three-month period, providing feedback on areas such as form, fit, comfort, Mortlock said. The APFU also was tested for things like durability, laundering, fiber strength, color fastness and color maintenance after laundering.

A key part of testing addressed the concern of some soldiers that a black shirt may cause over-heating. Instrumented tests showed that the lighter weight material and superior moisture wicking fabric more than compensated for any increased heat from the dark material, Army officials said.

The response to the APFU was “overwhelmingly positive,” Mortlock said, particularly with the trunks.

The APFU will come in two types, the Clothing Bag variant, and the Optional APFU, which will be visually the same as the APFU Issue variant, but uses some different materials. The individual items of the two variants can be mixed together. The Optional APFU variant will become available first when it arrives in Army military clothing sales stores sometime between October-December 2014.

The Clothing Bag issue variant will be issued to soldiers from the clothing initial issue points, starting between April to June 2015, and to Reserve, National Guard, and Senior ROTC from July-August 2015. The APFU will be phased in as the IPFUs are used up and worn out. The mandatory wear date will go into effect approximately October 2017, or about three years after the APFU is introduced.

The Army reached out to soldiers at “multiple touch points to ensure we got this right,” Mortlock said. “The message is we’re listening to soldiers. We’re continuing to listen to Soldiers, and this is the soldiers’ selection and Army leaders went along with this.”

Thank you to all our Service Members Aloha your 808 Oahu Realtor

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Making an Offer on a Short Sale? What You Need to Know

Are you looking to buy a new home? Are you thinking that now’s a great time to find bargains? Before you make an offer, it pays to know a little about the seller’s situation.

If a home is being sold for below what the current seller owes on the property—and the seller does not have other funds to make up the difference at closing—the sale is considered a short sale. Many more home owners are finding themselves in this situation due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market.

A short sale is different from a foreclosure, which is when the seller’s lender has taken title of the home and is selling it directly. Homeowners often try to accomplish a short sale in order to avoid foreclosure. But a short sale holds many potential pitfalls for buyers. Know the risks before you pursue a short-sale purchase.

You’re a good candidate for a short-sale purchase if:

  • You’re very patient. Even after you come to agreement with the seller to buy a short-sale property, the seller’s lender (or lenders, if there is more than one mortgage) has to approve the sale before you can close. When there is only one mortgage, short-sale experts say lender approval typically takes about two months. If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.
  • Your financing is in order. Lenders like cash offers. But even if you can’t pay all cash for a short-sale property, it’s important to show you are well qualified and your financing is set. If you’re preapproved, have a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer whose financing is less secure.
  • You don’t have any contingencies. If you have a home to sell before you can close on the purchase of the short-sale property—or you need to be in your new home by a certain time—a short sale may not be for you. Lenders like no-contingency offers and flexible closing terms.

If you’re serious about purchasing a short-sale property, it’s important for you to have expert assistance. Here are some people you want to work with:

  • A qualified real estate professional.* You may have a close friend or relative in real estate, but if that person doesn’t know anything about short sales, working with him or her may hurt your chances of a successful closing. Interview a few practitioners and ask them how many buyers they’ve represented in a short sale and, of those, how many have successfully closed. A qualified real estate professional will be able to show you short-sale homes, help negotiate the purchase when you find the property you want to buy, and smooth communications with the lender. (All MLSs permit, and some now require, special notations to indicate that a listing is a short sale. There also are certain phrases you can watch for, such as “lender approval required.”)
  • Title officer. It’s a good idea to have a title officer do an initial title search on a short-sale property to see all the liens attached to the property. If there are multiple lien holders (e.g., second or third mortgage or lines of credit, real estate tax lien, mechanic’s lien, homeowners association lien, etc.), it’s much tougher to get that short sale contract to the closing table. Any of the lien holders could put a kink in the process even after you’ve waited for months for lender approval. If you don’t know a title officer, your real estate attorney or real estate professional should be able to recommend a few.

Some of the other risks faced by buyers of short-sale properties include:

  • Potential for rejection. Lenders want to minimize their losses as much as possible. If you make an offer tremendously lower than the fair market value of the home, chances are that your offer will be rejected and you’ll have wasted months. Or the lender could make a counteroffer, which will lengthen the process.
  • Bad terms. Even when a lender approves a short sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, which may not be acceptable to some financially desperate sellers. In that case, the sellers may refuse to go through with the short sale. Lenders also can change any of the terms of the contract that you’ve already negotiated, which may not be agreeable to you.
  • No repairs or repair credits. You will most likely be asked to take the property “as is.” Lenders are already taking a loss on the property and may not agree to requests for repair credits.

The risks of a short sale are considerable. But if you have the time, patience, and iron will to see it through, a short sale can be a win-win for you and the sellers.


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What Homeowners Insurance Does Not Cover

A homeowners insurance policy offers basic protection from the most common disasters. But because it’s built with the average American household in mind, your policy might not account for some risks associated with your location or cover all your possessions.

Floods

Flood insurance is mandatory when you have a mortgage on a home in a high-risk flood area. Even if you live outside a high-risk area, don’t make the mistake of assuming you’ll never experience a flood. In fact, nearly 20% of flood insurance claims come from areas of moderate to low risk, according to the National Flood Insurance Program. Whether it’s a flash flood or just a few inches from a storm, water can cause massive damage to your home and belongings. If you’re not financially prepared, the effects can be devastating. The National Flood Insurance Program has joined with insurers to offer flood insurance. Premiums, which vary depending on where you live, start at just $129 a year.

Earthquakes

Basic homeowners insurance policies don’t offer earthquake coverage. Fortunately, in many states, special earthquake coverage can be added to your policy.

Anyone who has seen the aftermath of an earthquake understands the devastation one can cause. The extensive shaking and cracking can demolish entire buildings, destroying your home and possessions. If you live in an area prone to earthquakes, consider strengthening your policy with this coverage.

Home Businesses

Your homeowners policy provides limited coverage for business equipment. Also, you are not covered for liability related to your home business — if, for example, someone gets food poisoning through your catering business or if a student visiting your home trips and breaks an ankle while leaving a piano lesson. If you run a business from home or have expensive office equipment, you may need additional coverage.

Valuable Personal Property

Homeowners policies can offer sufficient coverage for most personal property, but there are limitations. Valuable personal property insurance can take over where homeowners policies leave off. VPP insurance can provide coverage for losses due to fire or theft. It also covers damage or if an item gets lost — say a stone falls out of a ring or the ring falls down the drain. If you own valuable items such as artwork, jewelry, musical instruments, firearms, furs or silver, consider obtaining a VPP policy.

Broader Personal Liability

Homeowners policies offer limited coverage for liability protection. Given the litigious world we live in, an umbrella insurance policy can provide additional peace of mind. An umbrella policy helps protect you and your earnings if someone, such as a baby sitter or handyman, is injured at your home. It also helps provide protection if you (or a family member) are found liable in a serious automobile accident.

This type of insurance can provide extended liability coverage beyond your home and auto policies. Consider shielding your personal financial assets with additional liability insurance.